This week, the Commerce Department is expected to wrap up a 17-month inquiry that may have a major impact on commerce worth tens of billions of dollars. According to the study, some Chinese producers were inappropriately dodging taxes by fabricating solar panels in other Asian countries and then exporting them to the US.
Trade experts: Commerce Department’s final judgment is unlikely
Bloomberg reported that the organization has already made a preliminary determination that exporters in Cambodia, Malaysia, Thailand, and Vietnam are evading the roughly ten-year-old levies intended to counteract unfair pricing and Chinese subsidization. Such a finding might subject some producers in the targeted countries to antidumping and countervailing duties starting in June that could be as high as 254%.
Trade experts think a complete reversal of the Commerce Department’s final judgment is unlikely, even though it may change for individual countries and industries.
A definitive judgement on circumvention would likely speed up efforts by renewable energy companies to divorce their supply chains from China in light of reports that essential solar equipment was produced using forced labor and a US statute that has led to the detention of imports with connections to the Xinjiang manufacturing cluster. Additionally, it can benefit businesses like First Solar Inc. and Qcells North America that are increasing their production capacity in the US.
To support local solar deployments while US manufacturers and other alternative suppliers build up, President Joe Biden already granted renewable developers and other solar importers a two-year grace period from increased duties. Businesses have taken advantage of the period to modify supply chains and stockpile duty-free equipment. As US customers turned to alternative suppliers, several impacted Asian manufacturers redirected their attention to European markets.
It is unclear, Commerce Department will tighten the criteria for importing solar modules and cells
Even said, the US continues to be largely dependent on imports from Southeast Asia, with the nations under investigation in the trade probe providing around 75% of the modules to the US. Domestic manufacturing won’t be able to fill the gap on its own.
Even with increased charges, there could be more than 50 gigawatts of tariff-free supply per year from the US, Southeast Asia, and India to cover domestic solar demand between 2024 and 2030, according to BloombergNEF analyst Pol Lezcano.
Under the moratorium, it is unclear if the Commerce Department will tighten the criteria for importing solar modules and cells. According to Biden’s order, the affected imports must be used on the US market within six months after the moratorium’s expiration in early June of next year.
In an article from AJOT, the Commerce Department’s handling of silicon wafers, which are used to create cells and eventually modules, is a crucial topic. At first, the agency intended to exclude from tariffs modules constructed with Chinese wafers as long as no more than two additional crucial inputs were domestically produced. Wafers made outside of China using polysilicon sourced there were also excluded from the circumvention investigation, according to Commerce.