Biden taps brakes on solar tariffs, moves to boost clean energy

Commerce Department will continue scrutiny of imports

The Commerce Department will scrutinize solar component imports from Chinese companies but won't impose tariffs for two years. (Bill Clark/CQ Roll Call file photo)
The Commerce Department will scrutinize solar component imports from Chinese companies but won't impose tariffs for two years. (Bill Clark/CQ Roll Call file photo)
Posted June 6, 2022 at 12:15pm

The White House announced a two-prong approach to clean energy Monday that senior administration officials said will keep the president’s “Made in America” agenda moving forward and delay for 24 months any new tariffs on imported solar components under scrutiny by the Commerce Department.

The White House said it isn't compromising the integrity of the Commerce Department's case, but is seeking to provide “stability and savings” to energy markets while the investigation continues.The two actions will keep the solar industry on track to have generating capacity of 22.5 gigawatts of electricity by 2024, up from 7.5 gigawatts at the start of the Biden administration.

The White House outlined the actions in fact sheet. A senior administration official fielded questions from reporters during a background call about the legality of invoking emergency powers to delay possible tariffs, saying the president was using the emergencies provisions of a 1930 law as the basis for the action. 

“This administration has been steadfast in making sure the processes around the implementation and enforcement of our trade laws are carried out consistent with those laws with integrity, appreciating the quasi-judicial nature of the specific investigation,” said the official, who is not named under the ground rules set by the White House for the call. 

“What you’re seeing the president do is to utilize an authority that is also provided in those very trade laws that allows him to recognize emergency circumstances and take action as a result of that,”  the official added.  

The senior administration official cited Section 318A of the Tariff Act of 1930 as the basis for Biden’s authority.  

In a statement issued after the White House call, Lisa Wang, Commerce assistant secretary for enforcement and compliance, said the president’s action doesn't affect the solar case.

“The Commerce Department’s anti-circumvention proceeding continues uninterrupted, and whatever conclusion Commerce reaches when the investigation concludes will apply once this short-term emergency period is over,” Wang said in a statement. 

Developers of solar utility projects have warned for months that uncertainty stemming from the possible outcome could paralyze growth in that sector. 

Auxin Solar Inc., a California company, petitioned the department for an investigation, alleging that several Chinese companies subject to prior U.S. tariffs for unfair trade practices are evading those penalties on crystalline silicon photovoltaic cell modules by assembling components in Cambodia, Malaysia, Thailand and Vietnam. The company is seeking duties as high as 250 percent on solar cells and modules. 

The Chinese companies then export those components to the U.S without the application of the additional tariffs. 

The duties were levied in 2012 because the companies were selling unfairly subsidized goods and products below the cost of production. Auxin Solar says the circumvention of the duties puts it at a competitive disadvantage.

Senior administration officials said the two-year “solar bridge” would apply to Cambodia, Malaysia, Thailand and Vietnam.

In addition to the delay in imposing any anti-dumping or countervailing duties, Biden also will issue a directive for the Energy and Defense departments to work together under the Defense Production Act to use grants, loans and procurement agreements to accelerate growth in clean energy industries. 

The two departments will focus on increased manufacturing of solar panels, building insulation, electric heat pumps, fuel pumps, electrolyzers that produce hydrogen gas and critical power grid infrastructure, a White House fact sheet said. 

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said her members had worked hard to highlight the need for action to the administration.

“While the Department of Commerce investigation will continue as required by statute, and we remain confident that a review of the facts will result in a negative determination, the president’s action is a much-needed reprieve from this industry-crushing probe," Hopper said. "During the two-year tariff suspension window, the U.S. solar industry can return to rapid deployment while the Defense Production Act helps grow American solar manufacturing."

Samantha Sloan, policy vice president for Arizona-based manufacturer First Solar Inc., said the administration was being shortsighted in its actions.

"Today’s proclamation directly undermines American solar manufacturing by giving unfettered access to China’s state-subsidized solar companies for the next two years.," Sloan said in a statement. She also said invoking the Defense Production Act fell short of proposals to set longer-term policies.

"Quite simply, the administration cannot stick a band-aid on the issue and hope that it goes away. Had the administration consulted with America’s solar manufacturers, they would have known as much," Sloan said.

Scott Paul, president of the Alliance for American Manufacturing, which strongly supports domestic manufacturing, gave grudging support for Biden’s actions.

“While I don’t believe solar installers deserved any tariff relief, the policies announced by the Biden-Harris administration today on balance should encourage clean energy manufacturing in America,” Paul said in a statement.

"The solar installation industry must also know that it can’t endlessly depend on subsidized imports to pad its profits in the years ahead. If solar is America's energy future, that future must be Made in America," he said. 

Benjamin J. Hulac contributed to this report.