Chinese Solar Manufacturers Dodged U.S. Tariffs, Probe Finds

Commerce Department findings are likely to accelerate importers’ race to find alternative sources 

By Yuka Hayashi of The WSJ. Excerpts:

"Four leading Chinese solar-cell manufacturers circumvented U.S. tariffs by routing some of their operations through Southeast Asia, a Commerce Department investigation found."

"The investigation began in March and prompted uncertainty over solar-parts imports, leading to the cancellation of solar projects across the U.S. and intervention by President Biden to ease pressure on the industry."

"The outcome of the probe won’t lead to immediate increases in solar tariffs because in June the president implemented a two-year suspension of duties to give importers time to make adjustments. The suspension applies to solar imports from the four countries covered by the investigation: Cambodia, Thailand, Vietnam and Malaysia.

But the Solar Energy Industries Association, a trade group for the U.S. solar industry, said the Commerce Department has touched off supply-chain disruption that won’t be resolved by the time the tariff suspension ends.

The probe and its findings “will strand billions of dollars’ worth of American clean-energy investments and result in the significant loss of good-paying, American, clean-energy jobs,” said Abigail Ross Hopper, the trade group’s president and chief executive.

With the four Southeast Asian countries accounting for roughly 80% of U.S. solar-panel imports, the department’s probe initially caused a significant slowdown in their shipments, leading to delays in solar-farm projects and triggering complaints from federal and state lawmakers and officials."

"The department’s decision highlights the challenge the U.S. faces in reducing its reliance on Chinese suppliers as it accelerates its shift to clean energy. U.S. solar installers and developers are facing an acute shortage of solar panels, now caused by new legislation giving U.S. authorities increased power to block imports of goods linked to forced labor practices in China. The shipment disruption has caused delays in solar deployment, threatening to derail the administration’s climate goals."