Legislators are moving to restore tariffs for the shipment of solar components from four major Southeast Asian nations, but the President will veto the move and maintain the pause on tariffs.
President Joe Biden is expected to veto a move by Congress to lift a two-year pause on tariffs for goods shipped from Vietnam, Cambodia, Thailand and Malaysia, which are responsible for roughly 80% of the U.S. supply of solar components.
“The Administration strongly opposes H.J. Res. 39, which would disapprove a rule issued by the Department of Commerce (Commerce) that temporarily suspends the collection of certain duties on imports of solar cells and modules,” said the White House in a press release.
The four Southeast Asian countries were allegedly harboring tariff-dodging products from China, which under antidumping and countervailing duty (AD/CVD) laws could lead to tariffs that range between 50% to 250% of the cost of shipped goods.
This looming threat of tariffs created an untenable level of risk that cascaded into cancelled and delayed projects. The effect was so stark that it led the Solar Energy Industries Association to cut its project deployment forecast in half for the year.
About 20% of utility-scale solar capacity was delayed or cancelled in the first half of 2022 due to supply problems and uncertainty. This uncertainty was temporarily lifted when President Joe Biden placed a 24-month moratorium on solar tariffs from the four nations on June 5, 2022.
This April, the House Ways and Means Committee voted 26-13 to end the moratorium and restore tariffs via the Congressional Review Act.
“We cannot allow foreign solar manufacturers to violate trade laws, especially when it comes at the expense of American workers and American businesses,” said Representative Dan Kildee (D-MI).
The tariff exemption applies to modules that are imported before June 6, 2024, or modules installed on project sites before December 2024. Biden’s two-year moratorium is meant to act as a bridge while U.S. domestic solar manufacturing ramps up, said Reuters.
“The United States currently lacks the capacity to produce solar panels and cells in adequate volumes to meet domestic demand,” said Abigail Ross Hopper, president and chief executive officer, Solar Energy Industries Association. “This strategic approach protects existing jobs while new ones are added, but it also helps sustain the robust environmental, national security and job-creating benefits offered by U.S. solar deployment.”
Commerce made a preliminary ruling in December that the four nations are guilty of breaking AD/CVD laws. The final decision for this ruling is scheduled for May 2, 2023.
