U.S. trade officials are set to announce new tariffs this week on solar panels imported from four Southeast Asian nations, following complaints from American manufacturers about unfair subsidies that undermine U.S. competitiveness.
The decision, scheduled for Tuesday, marks the first of two preliminary rulings by the Commerce Department in a trade case initiated by Hanwha Qcells of South Korea, Arizona-based First Solar, and several smaller firms aiming to safeguard their investments in U.S. solar manufacturing.
American producers argue that inexpensive imports from Chinese firms operating in Malaysia, Vietnam, Thailand, and Cambodia threaten President Joe Biden's initiative to enhance domestic manufacturing of clean energy technologies crucial for addressing climate change. Tim Brightbill, attorney for the American Alliance for Solar Manufacturing Trade Committee, noted, “They are hopeful that these cases will help to level the playing field.”
This decision will be historic as it will assess the impact of cross-border subsidies, where, for example, the Chinese government supports manufacturers in Vietnam. Previously, countervailing duties addressing such issues were prohibited, but this year, the Commerce Department finalized a rule to allow them.
In its April petition, the Hanwha-led committee alleged that Chinese manufacturers in these Southeast Asian countries benefit from substantial government subsidies, including low-cost financing, tax exemptions, and other forms of support, potentially under China's Belt and Road Initiative.
A separate anti-dumping case is also anticipated, with a preliminary ruling expected in November. Countervailing duties are generally lower than anti-dumping tariffs, which are designed to prevent foreign producers from selling products below market prices.
While the U.S. currently imposes a variety of duties on solar imports, not all domestic solar manufacturers are in favor of new tariffs. Companies establishing panel production facilities in the U.S. rely on low-cost solar cells from Southeast Asia for assembly. Additionally, solar project developers worry that new tariffs could escalate panel costs, which are already higher in the U.S. than in other global markets.
Jim Murphy, president of Invenergy, expressed concern about the potential impact of tariffs, stating, “Imposing tariffs on solar cell imports – when there's currently no solar cell manufacturing in the U.S. – will only enhance the profits of incumbent manufacturers, and will stifle America's ability to onshore the solar supply chain and meet the fast-growing demand for clean, affordable, and reliable power supply.”
