Chinese solar makers evaded US tariffs, according to investigations

Solar importers have also expressed their dissatisfaction with the decision, saying that a two-year halt is not enough time to build enough manufacturing capacity outside of China to meet growing US demand.

Huge planned investments in solar energy have raised the stakes for the debate. The Reducing Inflation Act, a sweeping new climate law that President Biden signed in August, It provides nearly $37 billion in incentives companies to produce solar panels, wind turbines, batteries and other critical minerals in the United States, with the goal of reversing the long-running migration of clean energy manufacturing to China and elsewhere.

The clash is the latest chapter in a decade-long struggle between the United States and China over the solar energy industry. In 2012, the United States began charging fees for Chinese solar panels, arguing that Chinese manufacturers were unfairly selling their products in the United States at prices below the cost of production. Chinese solar manufacturers shifted operations to Taiwan instead, but the US soon expanded its tariffs to apply to Taiwan as well.

In recent years, Chinese companies have set up new manufacturing operations in Southeast Asia, and exports of solar energy products to the United States have increased from Vietnam, Malaysia, Thailand and Cambodia. In many cases, these plants appear to rely on raw materials sourced largely from China, such as polysilicon.

This business model has proven problematic in more ways than one. The US government found the major Chinese producers of polysilicon and solar products guilty The use of forced labor in Xinjiang, China Any products using this polysilicon are banned from the United States.

Auxin Solar and other local manufacturers said the boom in business in Southeast Asia was an attempt by Chinese companies to evade tariffs imposed by the United States on Chinese products.

In a preliminary decision on the case Friday, Commerce Department officials agreed, at least in some cases. The Commerce Department will now require solar companies exporting to the United States from Thailand, Malaysia, Vietnam and Cambodia to certify that a significant proportion of their materials come from outside China. Otherwise, companies in those countries will be subject to the same fees paid by their Chinese suppliers starting in 2024. The Ministry of Commerce will continue to review the case and issue its final decision on the matter on May 1, 2023.