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Biden threatens veto on measure to restore solar tariffs

Legislation threatens to ”undermine” the domestic solar industry, White House says

The Ivanpah Solar Electric Generating Station generates electricity in the Mojave Desert in San Bernardino County, Calif.
The Ivanpah Solar Electric Generating Station generates electricity in the Mojave Desert in San Bernardino County, Calif. (Bill Clark/CQ Roll Call file photo)

President Joe Biden pledged to veto a joint resolution that would nullify waivers the Commerce Department issued for solar-energy materials coming to the U.S. from China through four Southeast Asian countries.

Biden issued his veto threat to lawmakers Monday, after the Ways and Means Committee voted last week to approve the joint resolution.

The White House said the legislation threatens to “undermine” the domestic solar industry and generate “deep uncertainty for jobs and investments in the solar supply chain and the solar installation market.”

In the statement of administration policy, the Office of Management and Budget said Biden, who issued the waivers on solar imports last summer, does not plan to extend them past June 2024, when they are scheduled to end.

“Passage of this joint resolution would undermine these efforts and create deep uncertainty for jobs and investments in the solar supply chain and the solar installation market,” the White House budget office said in its statement. “The Commerce rule provides a short-term bridge to ensure there is a thriving U.S. solar installation industry ready to purchase the solar products that will be made in these American factories once they are operational.”

The joint resolution underscores a gulf between Democrats who want to retain access for the solar industry to inexpensive materials used in its business, like wafers and photovoltaic cells, and those who want the administration to take a harder trade stance against China.

Preliminary results of a Commerce investigation, released in December, found Chinese solar companies have avoided U.S. import tariffs by routing their shipments through four other Asian nations — Cambodia, Malaysia, Thailand and Vietnam — before sending their goods to the U.S.

House Ways and Means ranking member Richard E. Neal, D-Mass., who was absent for last week’s markup, hasn’t taken a definitive position on the trade measure. But he wrote in a committee report released Friday that the inquiry from Commerce should not be “ignored.”

“For over a hundred years now, Congress has maintained trade remedies laws to address unfair trade practices,” Neal said. “Trade remedies underpin our open economy and are a critical tool to address unfair trade practices by the People’s Republic of China.”

Terri A. Sewell of Alabama was the lone Ways and Means Democrat to support the measure during last week’s vote, but two other Democratic panel members who didn’t attend the markup are co-sponsors: Dan Kildee of Michigan and Bill Pascrell Jr. of New Jersey. Other House Democratic co-sponsors include Ro Khanna of California and Chris Deluzio of Pennsylvania.

The Senate version has eight sponsors, all Republicans. But Democrats Bob Casey of Pennsylvania and Sherrod Brown of Ohio have also urged Biden to end the tariff suspension.

The joint resolution was drafted under the Congressional Review Act, a 1996 law allowing lawmakers to nullify federal agency actions with a simple majority vote in both chambers.

It’s not yet clear whether the measure can pass in both chambers, let alone secure veto-proof majorities. The clock is ticking as Commerce is expected to make a final determination on May 1 on whether the Chinese firms were illegally circumventing U.S. tariffs.

Solar power accounted for half of all new electricity-generating capacity added in the U.S. last year, according to the Solar Energy Industries Association, and residential solar installations grew 40 percent last year, versus 2021.

The Commerce inquiry has limited the industry’s growth in recent years, according to solar executives, and backlogs in connecting new solar projects have limited deployment in recent months.

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