WASHINGTON — The Biden administration on Monday announced a two-year hiatus from imposing new tariffs on the solar industry, following an outcry from importers who have complained that the tariffs will encourage wider adoption of solar in the United States. threaten.
The decision is a win for domestic solar installers, who said the tariffs would jeopardize the Biden administration’s goal of significantly reducing carbon emissions by the end of the decade. But it goes against the wishes of US manufacturers and unions, who have urged the government to put up tougher barriers to cheap imports to revitalize the domestic solar industry.
To counter these complaints and boost the domestic solar industry, the government also announced that it would take immediate steps to accelerate the domestic production of solar components. Those efforts include a series of presidential orders that President Biden will sign to invoke authorities under the Defense Production Act, which gives the president extensive powers and funding to direct the operations of private companies.
But trade experts said Mr Biden’s actions could still shorten trade laws aimed at protecting American workers, setting the White House on course to undermine an ongoing administrative investigation into possible trade violations by Chinese solar manufacturers.
The Commerce Department had considered imposing the tariffs as part of a commercial matter. The case accused Chinese solar companies of trying to circumvent existing taxes by relocating their operations from China to Southeast Asia, which now supplies most of the solar products used in the United States. In 2020, 89 percent of solar panels used in the United States were imported, with Vietnam, Malaysia, South Korea and Thailand accounting for the largest shipments.
If the Department of Commerce determines that the factories are set up to evade US tariffs, the government can retroactively impose tariffs on the factories’ shipments to the United States. But under the tariff “pause” Mr Biden ordered Monday, such tariffs could not be imposed for the next two years.
The Department of Commerce began its investigation after Auxin Solar, a small California-based solar panel manufacturer, requested an investigation into whether Chinese companies were circumventing regulations designed to prevent state-sponsored solar components from being sold. energy in the US market would be dumped by relocating factories to Vietnam, Malaysia, Thailand and Cambodia.
On Monday, Auxin’s CEO Mamun Rashid said President Biden was interfering with the investigation.
“By taking this unprecedented — and potentially illegal — action, he has opened wide the door for China-funded special interests to thwart the fair application of US trade law,” Mr Rashid said in a statement.
Commerce Department officials said their investigations would continue and any tariffs resulting from their findings would begin after the 24-month hiatus expired. “The president’s emergency declaration ensures that American families have access to reliable and clean electricity, while also ensuring that we can hold our trading partners accountable for their obligations,” Gina Raimondo, the secretary of commerce, said in a press release.
A Biden administration official said the government invoked Section 318(a) of the 1930 Tariff Act, which allows the president to suspend certain import duties to address an emergency.
But Scott Lincicome, a trade policy expert at the Cato Institute, a libertarian think tank, said the government’s actions “seemed “pretty much by statute.” The statute’s text permits the president to “declare an emergency, be it a state of war or otherwise,” and during such an emergency, to receive “food, clothing, and medical, surgical, and other supplies for emergency use” duty-free, noted. mr. Lincicome op.
US solar companies have said the prospect of more — and retroactively — tariffs has already had a chilling effect on imports. Groups such as the Solar Energy Industries Association are lobbying the White House against tariffs and welcomed news Monday that the government would halt new tariffs.
†Today’s actions will protect existing jobs in the solar industry, increase employment in the solar industry and create a robust base for solar energy production here at home,” said Abigail Ross Hopper, the president and chief executive of Solar Energy. Industries Association, in an emailed statement.
“During the two-year tariff suspension period,” she said, “the US solar industry can return to rapid implementation, while the Defense Production Act helps US solar production grow.”
The possibility of tariffs had been the start of an ugly battle in the US solar industry in recent months.
Companies that rely on imported products and officials who have tried to accelerate the transition to solar energy said the Commerce Department’s investigation had shut down installations across the country, slowing the transition from fossil fuels.
NextEra Energy, one of the largest renewable energy companies in the country, said it had expected to delay installing between two and three gigawatts of solar and storage structures — enough to power more than a million homes — due to the research.
“For the past few months, we’ve had to pause all construction efforts,” said Scott Buckley, president of Green Lantern Solar, a solar installer based in Vermont. Mr Buckley said his company had been forced to shut down about 10 projects, which would have resulted in the installation of about 50 square hectares of solar panels.
Mr Buckley said there was no easy solution to the country’s reliance on imported products in the near term, and the White House’s actions on Monday would allow companies like him to resume installations this year.
“This is an order to go back to work,” he said. “That’s what I think about it. Let’s clear the blockages.”
But domestic solar producers and US unions said these imports clearly violated US trade law, which prohibits companies from attempting to circumvent US tariffs by moving production or assembly of a product to another country. They accused importers of exaggerating the rigors of their industry to try to influence the Biden administration and preserve profit margins resulting from unfairly priced imports.
“If you have a supply chain that relies on dumped and subsidized imports, you have a supply chain problem,” said Scott Paul, president of the Alliance for American Manufacturing. White House officials said Monday that Mr. Biden would sign a series of guidelines designed to increase domestic development of low-emission energy technologies. He plans to make it easier for domestic suppliers to sell solar systems to the federal government. And he will direct the Department of Energy to use the Defense Production Act to “quickly expand” U.S. production of components for solar panels, building insulation, heat pumps, grid infrastructure and fuel cells, the government said in a fact sheet.
The Defense Production Act has become a favorite tool of Mr. Biden in his efforts to revitalize domestic manufacturing, including the production of essential minerals and baby food.
