The U.S. House of Representatives has recently voted to repeal the two-year pause on solar import tariffs for goods coming from four Southeast Asian countries, which are responsible for a significant portion of the U.S. solar panel supply chain. This move, which passed by a vote of 221-202, has sparked a heated debate among industry stakeholders.
Implemented in June 2022 by President Joe Biden, the moratorium on tariffs temporarily halted the imposition of tariffs on goods shipped from Vietnam, Malaysia, Thailand, and Cambodia. Under this policy, goods found to be in violation of anti-dumping and countervailing duty laws would face tariffs ranging between 50% to 250% of their shipped value.
However, the recent legislation seeks to lift this moratorium, much to the opposition of solar industry trade groups and major developers. They argue that such a repeal would have severe consequences, including the imposition of $1 billion in retroactive tariffs and the loss of 30,000 American jobs in the current year alone. Abigail Ross Hopper, the president and CEO of the Solar Energy Industries Association, emphasized the importance of the remaining 14 months of the moratorium to bridge the gap between supply and demand.
Supporters of the legislation, including Congressman Dan Kildee, argue that foreign solar manufacturers should not be allowed to violate trade laws at the expense of American workers and businesses. They cite China's evasion of U.S. tariffs on solar imports as a primary concern that needs to be addressed promptly.
Before the moratorium was put in place, the threat of tariffs created significant supply issues and risk, leading to the cancellation and delay of many solar projects. The Solar Energy Industries Association, for instance, reduced its project deployment forecast by half for the year due to the uncertainty caused by impending tariffs. Approximately 20% of utility-scale solar capacity was either delayed or canceled in the first half of 2022, resulting in serious setbacks for the industry.
Opponents of the legislation, such as George Hershman, the CEO of SOLV Energy, argue that political attempts to undermine President Biden's solar agenda could have detrimental effects on America's strength in solar deployment. They emphasize the potential negative impact on American projects, including bankruptcies, job losses, and increased energy costs.
While the tariff resolution now heads to the Senate for a vote, it is unlikely to pass President Biden's desk, as his administration has made it clear that they will veto any attempt to lift the moratorium. The Department of Commerce's investigation into violations of anti-dumping and countervailing duty laws by suppliers from the four countries is also set to conclude on May 2, 2023, adding further complexity to the situation.
