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Decision in US-China Solar Trade Probe Will Restructure Billions in Trade

The US and China on trades

The conclusion of a 17-month investigation by the Commerce Department is anticipated this week, and it could have a significant impact on solar trade probe worth tens of billions of dollars.

Solar energy in the forest

The investigation found that some Chinese manufacturers were improperly evading tariffs by assembling solar equipment in other Asian nations before shipping it to the US.

One of many delicate economic and commercial concerns between the US and China, the solar trade probe discord may result in high import taxes on Chinese panels, which would aid struggling American manufacturers.

Companies in the U.S. solar sector that depend on importing low-cost panels to increase solar power generation are opposed to the action.

In connection to the solar trade probe, in order to support local solar deployments while US manufacturers and other alternative suppliers scale up, President Joe Biden already granted renewable developers and other solar importers a two-year grace period from increased duties.

In an article by Jennifer A. Dlouhy on Bloomberg News, the organization has already made a preliminary determination that exporters in Cambodia, Malaysia, Thailand, and Vietnam are evading the roughly decade-old levies intended to counteract unfair pricing and Chinese subsidization on solar trade probe.

Such a finding might subject some producers in the targeted countries to antidumping and countervailing duties starting next June that could be as high as 254%.

In connection to the solar trade probe, although the Commerce Department’s ultimate decision may alter for some nations and businesses, trade experts say a complete reversal is improbable.

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The US continues to be largely dependent on imports from Southeast Asia, with the nations under investigation in the solar trade probe investigation providing nearly 75% of the modules to the US.

Businesses have altered their supply networks and acquired duty-free products during this time. As US buyers looked for other suppliers, many impacted Asian firms turned their attention to the European markets.

Abigail Ross Hopper said about the solar trade probe, that the rise of clean energy in the United States would surely be slowed by a ruling that followed the preliminary determination, and new jobs and investments would be lost as a result.

Under the moratorium, it is unclear if the Commerce Department will tighten the criteria for the solar trade probe. According to Biden’s order, the affected imports must be used on the US market within six months after the moratorium’s expiration in early June of next year.

The said department’s handling of silicon wafers is a topic if it would be changed for the betterment of the processes of solar trade probe.

Modules made with Chinese wafers were initially going to be exempt from taxes as long as no more than two other essential components were made locally. The circumvention examination was also not conducted on wafers produced outside of China using polysilicon obtained from that country.

The outcome of the US-China solar trade probe investigation is expected to have far-reaching repercussions on the billions of dollars in bilateral trade. Although it aims to support American solar companies and increase employment at home, it also runs the risk of slowing down the growth of the solar industry as a whole and escalating trade conflicts.

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