Commerce probe finds Chinese solar manufacturers dodged US tariffs

The Commerce Department has reached a preliminary determination that Chinese solar panel manufacturers illegally circumvented U.S. tariffs by shipping them through southeast Asian nations.

A Commerce official confirmed on a call with reporters Friday morning that the investigation found four companies were engaged in circumvention: BYD Hong Kong, Canadian Solar, Vina Solar and Trina. The official also identified solar companies that were determined not to have circumvented tariffs, including New East Solar, Hanwha, Boviet and Jinko.

The tariffs will not be actively collected until June of 2024, according to the official.

The investigation began earlier this year in response to a complaint filed by U.S. company Auxin Solar, which alleged Chinese manufacturers were evading U.S. tariffs by routing manufacturing through Thailand, Cambodia, Vietnam and Malaysia. The probe was vocally condemned by the U.S. solar power industry at large, which warned that it could severely disrupt the renewable energy supply chain as the Biden administration has set a tight deadline to cut greenhouse gas emissions.

Pro-solar energy members of Congress have questioned the investigation as well. “We are only able to supply about 15 percent domestically of the demand for solar panels. So we don’t have the capacity here right now to fulfill all the orders there are and even finish the projects that are already bid out,” Sen. Jacky Rosen (D-Nev.) told The Hill in May.

In June, President Biden announced the four nations in question would be exempted from solar tariffs for two years to offset any impact from the investigation, “in order to ensure the U.S. has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up.”

“The only good news here is that Commerce didn’t target all imports from the subject countries,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said in a statement Friday. “Nonetheless, this decision will strand billions of dollars’ worth of American clean energy investments and result in the significant loss of good-paying, American, clean energy jobs. While President Biden was wise to provide a two-year window before the tariff implementation, that window is quickly closing, and two years is simply not enough time to establish manufacturing supply chains that will meet U.S. solar demand.

The Hill has reached out to BYD Hong Kong, Canadian Solar, Vina Solar and Trina for comment.