Potential New Solar Tariffs Spark Uncertainty in Industry Amidst AD/CVD Concerns

Amidst recent reports from Roth Capital Partners, the solar industry finds itself at the brink of potential new antidumping and countervailing duty (AD/CVD) tariffs, signaling a period of uncertainty and speculation within the sector. Philip Shen, managing director at Roth Capital Partners, addressed concerns in an industry note, shedding light on the looming threat of ongoing tariff enforcement actions within the United States.

Shen’s note pointed to updated regulations from the Department of Commerce, hinting at the possibility of new AD/CVD cases being filed as early as April 25. This development has prompted discussions and speculation regarding the future trajectory of the solar industry’s trade landscape, injecting a sense of caution and anticipation among industry stakeholders. The significance of AD/CVD laws in addressing the issue of goods evading import duties by dumping products in other countries before reaching the U.S. market cannot be understated. In a previous AD/CVD proceeding, scrutiny fell upon several Southeast Asian countries, including Vietnam, Cambodia, Thailand, and Malaysia, which were suspected of harboring dumped products from China. These countries collectively accounted for approximately 80% of the U.S. supply of solar components.

The resulting tariffs imposed on components found in violation exhibited a wide range, spanning from 50% to a staggering 250% of the cost of shipped goods. The uncertainty surrounding potential tariffs had cascading effects throughout the market, contributing to heightened risk levels and leading to delays or cancellations in about 20% of utility-scale solar capacity projects during the first half of 2022. In response to mounting concerns, President Biden took action by initiating a two-year pause on new solar AD/CVD tariffs in June 2022. However, with this temporary relief set to expire later this summer, the industry remains on edge, grappling with lingering uncertainty regarding the potential magnitude of tariffs in the upcoming case later this month.

According to insights gleaned from industry sources cited by Roth, there is a sense of anticipation surrounding the prompt filing of petitions for AD/CVD cases following the April 25 deadline. The strategic timing of these filings, aimed at aligning preliminary decisions with the upcoming election season, hints at potential political implications that could further complicate the landscape. Moreover, speculation abounds that India may join the ranks of the four Southeast Asian nations under investigation in this round of AD/CVD inquiries, adding another layer of complexity to the unfolding scenario. As stakeholders across the solar industry await further developments, a sense of vigilance prevails. Navigating the evolving regulatory environment and its potential impact on trade relations within the sector remains a top priority, underscoring the need for proactive engagement and strategic planning in the face of uncertainty.