On August 18, the U.S. Department of Commerce concluded an investigation it launched early last year on solar cells and modules from the People's Republic of China (PRC). Commerce provided its conclusions in a Federal Register notice, highlighting that five specific Chinese companies are shipping Chinese-origin solar products to certain Southeast Asian countries for minor processing in an attempt to circumvent U.S. Antidumping/Countervailing (AD/CVD) duties on such products However, duties on these imports will not be collected or assessed until June 2024, when a waiver enacted by the Biden administration is set to expire.
Commerce's investigation began in March 2022 in response to a complaint filed by Auxin Solar, a U.S. manufacturer which alleged that Chinese manufacturers were evading U.S. tariffs on such products from China by routing manufacturing through Thailand, Cambodia, Vietnam and Malaysia. Nearly three-quarters of solar modules imported into the U.S. originate from these countries. Commerce found that five out of the eight Chinese companies it investigated are engaged in evasion of U.S. AD/CVD duties by producing such products in the five countries from Chinese-origin components. The Chinese companies are - BYD Hong Kong, New East Solar, Canadian Solar, Trina Solar, and Vina Solar. The other three entities investigated (Boviet Solar, Hanwha Q CELLS, and Jinko Solar) were determined to not be circumventing. The final results reflect those of Commerce's preliminary report released in December of last year, with the exception of New East Solar, having previously been found not to be circumventing duties, but being added to the list after not cooperating with auditors during the investigation.
The investigation has generated significant controversy among policymakers due to its potential impacts on the Biden Administration's climate and energy policy agenda - U.S. Energy Secretary Jennifer Granholm stated under congressional testimony that "at stake is the complete smothering of the investment and the jobs and the independence that we would be seeking as a nation to get our fuel from our own generation sources." Solar industry groups have also voiced their disapproval with the investigation, highlighting that it puts the entire industry at risk. According to the Solar Energy Industries Association, 318 solar projects across the U.S. have been canceled or delayed as a result of Commerce's investigation, which threatens the Biden Administration's plan to cut the cost of solar electricity in half by 2030.
In response to these concerns, President Biden issued Proclamation 10414 on June 6, 2022, which temporarily suspends any antidumping or countervailing duties on imports of silicon photovoltaic cells and modules from Thailand, Cambodia, Vietnam and Malaysia and using parts and components manufactured in the PRC for two years up until the "Date of Termination" - June 6, 2024. In its final affirmative ruling issued last Friday, Commerce stated that it will not collect duties pursuant to Biden's decision "as long as the imports are consumed in the U.S. market within six months of the termination of the President's Proclamation", meaning up until December 6, 2024. The ruling also highlights that, in order to be exempt from U.S. duties following the expiration of the waiver, all solar providers in Vietnam, Malaysia, Thailand, and Cambodia (including companies not specifically investigated by Commerce) must self-certify that they are not circumventing the AD/CVD orders and otherwise complying with all findings in this case, with those claims being subject to potential audit.
Both sides are likely to appeal this decision to the Courts.
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