Two U.S. solar manufacturers have legally contested the Biden administration’s decision to temporarily suspend tariffs on some solar panel imports from Southeast Asia. This development introduces a potential complication for an industry already facing supply chain challenges.
The challenge, submitted last week to the US Court of International Trade, disputes President Joe Biden’s executive action, which aimed to mitigate a trade barrier that had been impeding solar panel imports from the region. This legal action comes in the wake of the US Commerce Department’s finding in August that some Chinese solar manufacturers were circumventing long-standing anti-dumping and countervailing duties by assembling products in Cambodia, Malaysia, Thailand, and Vietnam — key suppliers of the U.S. solar market.
Under normal circumstances, this finding would lead to expanded duties on affected imports. However, in an effort to support domestic renewable energy growth and allow time for the expansion of American solar manufacturing, Biden implemented a two-year suspension of these tariffs.
Auxin Solar Inc and Concept Clean Energy Inc, which manufacture solar modules and structures respectively, are targeting a specific Commerce Department regulation. This regulation prevents new anti-dumping or countervailing duties on solar panels and cells from the four mentioned countries until June 6.
The companies argue that the tariff suspension lacks a legal basis and unfairly benefits the Chinese government, potentially harming U.S. manufacturers and those seeking to establish a domestic solar supply chain. They claim that the Biden administration has neglected U.S. solar manufacturing workers and disregarded established law by granting what they call an “ill-begotten tariff holiday” for Chinese-affiliated trade practices.
Following the tariff moratorium, imports of the affected solar equipment have significantly increased, which the companies describe as a severe threat to the domestic solar industry.
The 2022 moratorium by President Biden, which was a response to the anticipated imposition of new duties, had rejuvenated the import of solar panels from Southeast Asia, leading to record levels last year. This had previously been stalled due to the threat of new tariffs, causing delays in several U.S. solar projects.
Despite the potential uncertainty introduced by this legal challenge, industry analysts note that companies have accumulated significant solar panel inventories in the U.S., which might mitigate immediate impacts of the moratorium’s conclusion.
Timothy Fox, from ClearView Energy Partners, a Washington-based research firm, commented that while the challenging companies face a difficult task in overturning Biden’s proclamation, the frequency of law invocation does not diminish its legitimacy. The companies contend that Biden used an uncommon legal provision for his action, which they describe as “unprecedented,” “seldom used,” and “rarely used.”
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