U.S. government opens investigation into Chinese solar imports' evasion of punitive tariffs

As a result of a »thorough, transparent, and data-driven investigation,« the U.S. Department of Commerce (DoC) has issued a preliminary determination on eight Asian solar companies accused of evading applicable antidumping and »countervailing« duties. The case was opened following a complaint filed in February by U.S.-based Auxin Solar. Specifically, the complaint alleged that solar modules imported from Cambodia, Malaysia, Thailand and Vietnam were only processed to a »minor« extent in the countries in question, while significant steps of production take place in China.
According to the preliminary findings of the DoC, circumvention within the meaning of the applicable regulations exists at BYD Hong Kong (imports from the production site in Cambodia), Canadian Solar and Trina Solar (both Thailand), and Vina Solar (Vietnam). The Department did not identify any violation at New East Solar (Cambodia), Hanwha and Jinko (both Malaysia), and Boviet (Vietnam). In addition, according to DoC, »some companies in Malaysia, Cambodia, and Vietnam« did not respond to inquiries directed to them; therefore, circumvention is also presumed in these cases.
Since all four countries investigated were found to be circumventing, each of these countries is subsequently deemed to be »one through which solar cells and modules are being circumvented from the People‘s Republic of China.« This does not mean an import ban, but companies from the countries in question must prove that they are not circumventing U.S. regulations. No action will be taken against the companies investigated so far that have not been found to be circumventing, »as long as their production process and supply chain do not change.«
Moreover, the findings of the investigation are preliminary, and all parties will now be given the opportunity to comment. A final decision is »currently scheduled for May 1, 2023«. Further, regardless of the DoC proceeding, the order issued by President Joe Biden on June 6 that cells and modules from the affected four countries will not be subject to punitive tariffs until June 2024, provided the goods are used in the U.S. within six months of importation, continues to apply.
Despite this suspensive effect, the U.S. Solar Energy Industries Association (SEIA) called the DoC‘s decision a »mistake that we will have to deal with for the next several years.« The two-year window opened by President Biden for imposing punitive tariffs is closing fast, SEIA said, and »two years is simply not enough time to establish manufacturing supply chains that meet U.S. solar demand.«
According to SEIA, production of cells and modules in the affected countries »greatly exceed the anticircumvention statute’s ›minor or insignificant processing‹ limitation.« Even if the DoC did not target all imports from the four countries in question, which is »the only good news« in SEIA’s point of view, the decision would nonetheless »strand billions of dollars’ worth of American clean energy investments and result in the significant loss of good-paying, American, clean energy jobs.«

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