Chinese Solar Makers Face New Tariffs After US Says They’re Dodging Duties

Some solar cells and modules exported from Southeast Asia may now be subject to tariffs of up to 254% in June 2024, as the Commerce Department has determined that companies operating in Cambodia, Malaysia, Thailand, and Vietnam are evading the longstanding duties.

The United States has identified five Chinese or Chinese-affiliated companies as evading tariffs: BYD (H.K.) Co. Ltd. and New East Solar (Cambodia) Co. Ltd. in Cambodia; Canadian Solar Inc. in Thailand; Trina Solar Science & Technology and Vina Solar Technology Co., a division of Longi Green Energy Technology Co. in Vietnam; and BYD (H.K.) Co. Ltd. and New East Solar (Cambodia) Co. Ltd. in Hong Kong.

A senior Commerce Department official who briefed reporters on the investigation’s findings stated that the investigation, which included site visits and factory audits, is a signal that the Biden-Harris administration is serious about trade enforcement and a warning to other businesses engaging in similar circumvention schemes.

Ultimately, the ruling should benefit solar manufacturers in the United States, which are already expanding domestic production capacity with the help of incentives from the climate law passed last year. To minimize potential exposure to new tariffs and a US forced labor law aimed at products associated with China’s Xinjiang, many US power companies began diversifying their supply chains in advance of the decision.

The Commerce Department’s decision could also exacerbate tensions between Washington and Beijing, despite the fact that the two superpowers are attempting to strengthen their relationship.

As of 10:46 a.m. in New York, shares of Canadian Solar were up 0.2% after prior losses of up to 1.6%.

In the short term, the ruling could accelerate US purchases of affected solar equipment prior to the implementation of the expanded tariffs the following year, as renewable power developers seek to stockpile tariff-free equipment. President Joe Biden issued a proclamation in 2022 providing a two-year grace period intended to sustain US solar deployments while domestic manufacturing ramps up and developers restructure their supplier networks.

Some US lobbyists attempted unsuccessfully to persuade the Commerce Department to go further and crack down on solar imports containing polysilicon and ingots produced in China, which are early precursors to the production of solar panels. However, the agency adhered essentially to the preliminary determination it issued in December.

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