President Biden’s two-year halt on solar import tariffs is intended to create a bridge of supply as the U.S. ramps its domestic manufacturing capacity.
Passing by a 221-202 vote, the U.S. House of Representatives moved to repeal the two-year pause on solar import tariffs goods from four Southeast Asian countries responsible for about 80% of the U.S. solar panel supply chain.
The moratorium on tariffs, passed in June 2022 by President Joe Biden, halted tariffs on goods shipped from Vietnam, Malaysia, Thailand, and Cambodia. Goods found in violation of anti-dumping and countervailing duty laws would be assessed with tariffs ranging between 50% to 250% of their shipped value.
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 supply bridge while U.S. domestic solar manufacturing ramps up.
Solar industry trade groups and major developers have voiced strong opposition to lifting the moratorium.
“The legislation will impose $1 billion in retroactive tariffs and cause 30,000 Americans to lose their jobs this year,” said Abigail Ross Hopper, president and chief executive officer of the Solar Energy Industries Association.
Ross Hopper added that the U.S. does not have enough production to meet demand, and the remaining 14 months of the moratorium are needed to “close the gap.” “We are urging senators to see through this political charade and examine the facts at hand,” she added.
The legislation was kicked off by a small bipartisan group in January via the Congressional Review Act.
“We cannot allow foreign solar manufacturers to violate trade law, especially when it comes at the expense of American workers and businesses,” said Congressman Dan Kildee (D-MI). “The Biden administration found in its own investigation that China is evading U.S. tariffs on solar imports, but has paused action on this matter, which is unacceptable.”
Prior to Biden’s 2022 moratorium, looming threat of tariffs created supply issues and high levels of risk that led to cancelled and delayed projects. The effect was so stark that pre-moratorium, SEIA 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.
“Political attempts to undermine the President’s agenda threaten to undercut America’s strength in solar deployment,” said George Hershman, chief executive officer, SOLV Energy. “I urge members of the Senate to vote against this harmful resolution.”
“Many of the nation’s largest trade unions have joined clean energy companies in opposing this legislation, which would result in American projects being delayed or cancelled, leading to bankruptcies, job loss, and increased energy costs,” said Jason Grumet, chief executive officer, American Clean Power Association.
The tariff resolution next heads to the senate for a vote. However, it is unlikely to make it past President Biden’s desk, as his administration made it clear he will maintain the tariff pause with a veto.
“The Administration strongly opposes H.J. Res. 39, which would disapprove a rule issued by the Department of Commerce that temporarily suspends the collection of certain duties on imports of solar cells and modules,” the White House said in a press release.
The Department of Commerce made a preliminary ruling in December that some suppliers from the four countries are guilty of violating anti-dumping and countervailing duty laws. The investigation is expected to conclude with Commerce’s ruling, scheduled for May 2, 2023.
