U.S. trade officials this week may impose new tariffs on solar panels from four Southeast Asian nations that American manufacturers have complained employ unfair subsidies that make U.S. products uncompetitive.
The announcement, due on Tuesday, is the first of two preliminary decisions the Commerce Department will make this year in a trade case brought by Korea’s Hanwha Qcells, Arizona-based First Solar and several smaller companies seeking to protect billions of dollars in investments in U.S. solar manufacturing.
The domestic producers argue that competition from cheap imports by Chinese companies operating in Malaysia, Vietnam, Thailand and Cambodia threatens U.S. President Joe Biden’s goal to boost domestic manufacturing of clean energy technologies needed to combat climate change.
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“They are hopeful that these cases will help to level the playing field,” Tim Brightbill, the group’s attorney, said in an interview last month.
Commerce’s decision will for the first time consider the impact of cross-border subsidies, for instance the Chinese government subsidizing a manufacturer in Vietnam or elsewhere. Such countervailing duties had previously been banned but this year the department finalized a rule that allowed them.
In its April petition, the Hanwha-led American Alliance for Solar Manufacturing Trade Committee alleged that Chinese manufacturers operating in the four Southeast Asian countries received generous subsidies from those governments in the form of cheap financing, electricity and land, tax exemptions and more. The group also alleged the companies receive subsidies from China like cut-rate raw materials and components as well as other support via its Belt and Road Initiative, a decade-old infrastructure program to link China with Asia, the Middle East and Europe.
A companion anti-dumping case is expected to receive a preliminary decision in November. Countervailing duties tend to be lower than anti-dumping duties, a form of tariff meant to keep overseas producers from selling at below market prices.
The U.S. already collects an array of duties on solar imports.
Not all U.S. solar manufacturers want Commerce to impose new tariffs on solar imports.
Companies setting up panel factories, for instance, rely on low-cost solar cells from Southeast Asia to assemble into panels in the U.S. Many U.S. panel plants are owned by large China-based manufacturers.
Solar project developers also worry that tariffs will hurt their business by driving up the cost of panels, which are already more expensive in the U.S. than anywhere else in the world.
“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” said Jim Murphy, president of Invenergy, a Chicago-based project developer that is also the joint owner, with China’s Longi, of Ohio solar panel maker Illuminate USA.
(Reporting by Nichola Groom; Editing by David Gregorio)
