Biden to suspend new solar tariffs as White House aims to boost adoption

WASHINGTON – The Biden administration announced on Monday that it was suspending any new tariffs on the solar industry, a decision Outcry from importers Those complaining about the tax are threatening wider adoption of solar in the US.

The move is a victory for domestic solar installers, they say Tariffs will be at risk The Biden administration’s goal is to drastically reduce carbon emissions by the end of the century by reducing the flow of products into the United States. But that goes against the wishes of some U.S. solar manufacturers and their defenders, who have been pushing for tougher government barriers to cheap imports to help revive the domestic industry.

This is the latest example of President Biden Caught between competing impulses Trying to steer America away from the fossil fuels that warm the planet, as he promised. By limiting tariffs, Mr. Biden will ensure an ample supply of cheap solar panels during times of high inflation and try to get stalled solar projects back on track. But the decision will delay other White House efforts that could punish Chinese companies for trade violations and weaken Beijing’s role in global supply chains.

In response to complaints from the domestic solar industry, the U.S. government said Biden would try to speed up U.S. solar panel manufacturing, including by invoking authorization from the Defense Production Act, which gives the president greater powers and funding to direct solar panel activity . private enterprise.

The prospect of additional tariffs stems from the Commerce Department’s ongoing investigation into whether Chinese solar companies already affected by the tariffs are trying to circumvent them by: Move business from China to Southeast Asia.

Auxin Solar, a small solar panel maker based in California, has requested an investigation, which is examining imports from Vietnam, Malaysia, Thailand and Cambodia.

In 2020, 89% of solar modules used in the United States were imported, with Southeast Asian countries accounting for the majority of shipments.

If the Commerce Department determines that the plants were set up to circumvent U.S. tariffs, the administration can retroactively impose tariffs on goods shipped to the U.S. But under the “pause” of tariffs ordered by Biden on Monday, such tariffs cannot be imposed for the next two years.

The decision is the latest twist in the U.S. government’s long-running whack-a-mole game against cheap imports from the solar industry.

While U.S. companies were among the first to introduce solar technology, China has dominated global solar manufacturing in recent decades by subsidizing production and creating a vibrant domestic market for solar installations. In 2011, the United States imposed tariffs on Chinese products to offset subsidies and unfairly low prices. U.S. installers then started buying more from Taiwan, but the U.S. also imposed tariffs on Taiwan in 2015.

Trade experts say the tariff suspension could weaken trade laws designed to protect U.S. workers by allowing Chinese companies to continue supplying the U.S. with cheap imports.

On Monday, Auxin’s chief executive Mamun Rashid said President Biden was interfering in the investigation.

“By taking this unprecedented – and potentially illegal – action, he opened the door for Chinese-funded special interests to undermine the fair application of U.S. trade law,” Mr Rashid said in a statement. .

To suspend tariffs, a Biden administration official said the administration is invoking part of the Tariff Act of 1930, which allows the president to suspend certain import tariffs in response to emergencies. Commerce officials said their investigation would continue and that any tariffs resulting from their findings would begin after the 24-month moratorium expires.

“The President’s emergency declaration ensures American households have access to reliable and clean electricity, while ensuring we have the ability to hold our trading partners accountable for their commitments,” Commerce Secretary Gina Raimondo said in a release.

The possibility of tariffs has sparked an ugly fight over the future of the U.S. solar industry in recent months.

The prospect of more — and retroactive — tariffs has already had a chilling effect on imports, U.S. solar companies said. Groups such as the Solar Energy Industries Association, whose members include several Chinese manufacturers with U.S. operations, have been lobbying the White House against the tariffs, and on Monday welcomed news that the administration would suspend any new levies.

Today’s actions protect existing solar jobs, will increase solar industry jobs, and foster a strong domestic solar manufacturing base,” said Abigail Ross Hopper, SEIA President and CEO Hopper) said in an emailed statement.

“During the two-year tariff moratorium window,” she said, “the U.S. solar industry can resume rapid deployment, and the Defense Production Act helps grow U.S. solar manufacturing.”

Companies that rely on imports — and U.S. officials who prioritize the transition to solar — have been complaining that the Commerce Department investigation has injected uncertainty into the future pricing of the solar market, slowing the transition away from fossil fuels. NextEra Energy, one of the country’s largest renewable energy companies, has said it expects to delay the installation of 2 to 3 gigawatts worth of solar and storage — enough to power more than 1 million homes.

“We’ve had to put all construction on hold for the past few months,” said Scott Buckley, president of Vermont-based solar installer Green Lantern Solar. Mr. Buckley said his company was forced to shelve about 10 projects that would have resulted in the installation of about 50 acres of solar panels.

Mr Buckley said there was no easy solution to the country’s reliance on imports in the short term, and Monday’s action by the White House would allow companies like his to resume installations this year.

“This is an order to resume work,” he said. “That’s what I thought. Let’s clear the deadlock.”

But domestic solar producers and U.S. unions say the recent surge in imports from Chinese companies manufacturing in Southeast Asia is a clear violation of U.S. trade law, which bars companies from trying to evade U.S. tariffs by shifting the production or assembly of a product to another product . nation.

Domestic producers have accused importers with close business ties to China of exaggerating the hardships of their industry in an attempt to influence a Biden administration and preserve profit margins that have been generated by unfair pricing of imports.

“If your supply chain is dependent on dumping and subsidizing imports, you’re going to have problems with your supply chain,” said Scott Paul, president of the American Manufacturing Alliance.

“We’re increasingly dependent on hostile countries that don’t have enough domestic production to insure protection from price hikes and supply shocks,” said Michael Sturmer, chief executive of the Coalition for a Prosperous America, a nonprofit that promotes domestic manufacturing. “Whether it’s medicines, personal protective equipment or solar panels, it has to be produced domestically.”

Some critics also said the legal basis for the White House move was specious, arguing that the administration was actually declaring a state of emergency over the fallout from its trade laws.

Scott Linthicombe, a trade policy expert at the Cato Institute, a liberal think tank, said the government’s actions appeared “pretty outdated”.

The trade law provisions Biden invoked allow the president to “declare the existence of a state of emergency, whether due to a state of war or otherwise,” and import “food, clothing, and medical, surgical, and other supplies used in emergency relief efforts” tax-free under such a state of emergency. .

Critics of U.S. tariffs have long proposed a “public interest” test that would allow the levy to be removed to mitigate broader economic damage, but Congress has never approved such an action, he said.

In a letter late last month, Ohio Sen. Sherrod Brown and Pennsylvania Sen. Bob Casey, both Democrats, complained that solar importers “spend millions of dollars in advertising and lobbying to urge Political interference in the trade enforcement process”. Biden administration officials have previously said the Commerce Department’s investigation is free from political interference, calling it “quasi-judicial” and “apolitical.”

Solar tariffs have been a point of contention for decades, but they have become more important in recent years as the consequences of climate change have become more apparent. Chinese companies have expanded internationally, allowing them to continue shipping products to the U.S., while U.S. companies have struggled to compete.

The global solar industry’s dependence on China Complicating Biden Administration Efforts Products linked to forced labor are banned in Xinjiang, where Chinese authorities have detained more than a million Uighurs and other ethnic minorities, U.S. officials say.Xinjiang is major producers Polysilicon is the raw material for solar panels.

Solar importers complain last year’s ban A multi-billion-dollar U.S. project on Hoshine Silicon Industry’s use of forced labor to manufacture solar raw materials has temporarily halted as companies struggle to provide customs officials with documentation to prove that neither they nor their suppliers received material from Hoshine.

High oil prices have also thwarted a broader desire to push the country away from oil after Russia invaded Ukraine in February, leaving Mr Biden to demand that producers in the Middle East and beyond raise output.

Biden will sign a set of directives aimed at promoting the development of low-emission energy technologies at home, White House officials said on Monday. He would make it easier for domestic suppliers to sell solar systems to the federal government. The administration said in a fact sheet that he would order the Department of Energy to use the Defense Production Act to “rapidly expand American-made” solar panel components, building insulation, heat pumps, grid infrastructure and fuel cells.

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