The US Department of Commerce (DOC) has released a final regulation aimed at enhancing the anti-dumping and countervailing duty (AD/CVD) regulations. This ultimate decision closely follows the DOC's proposed rules from May 2023, with slight adjustments intended to bolster the enforcement and management of the AD/CVD laws.
The recent changes include a regulation aimed at addressing federal court rulings that have limited the US Department of Commerce's ability to assess market changes. The final rule provides examples of market situations that distort production costs, such as overcapacity, oversupply, subsidies, and duty exemptions.
Additionally, the final ruling eliminates the DOC's restriction on transnational subsidies, allowing for potential countervailing of programs like China's Belt and Road Initiative. This change reflects a less restrictive interpretation of the law, given the increasing prevalence of transnational subsidies.
Furthermore, the DOC acknowledges that inadequate government regulations on human rights, labor rights, and environmental protections enable foreign competitors to produce goods at lower costs. The goal of these adjustments is to strengthen the enforcement and administration of AD/CVD laws, improve efficiency, and address factors that create unfair trade conditions.
These modifications will be effective from April 24, 2024, as stated in the final ruling published by the DOC on March 25. The complete ruling on AD/CVD laws can be found here.
SEMA Coalition calls for ‘level playing field’ on solar manufacturing
It has been a busy week for US policy, as Senators Jon Ossof and Reverend Raphael Warnock have urged President Joe Biden to remove an ongoing tariff exemption on bifacial modules. In their letter to Biden, the senators emphasized that lifting this exemption would relieve pricing pressure and support the growth of a crucial US industry. They noted that bifacial modules make up nearly 90% of PV module imports.
On March 27, the Solar Energy Manufacturers for America (SEMA) Coalition called on the Biden Administration to "level the playing field" for the US solar industry following Treasury Secretary Janet Yellen's visit to solar cell manufacturer Suniva, which has a solar cell supply agreement with module manufacturer Heliene.
Mike Carr, executive director of the SEMA Coalition, commended Secretary Yellen for highlighting the unfair advantage currently enjoyed by Chinese-headquartered manufacturers. He emphasized the need to strengthen the domestic supply chain for producing components in the US to address this issue.
The SEMA Coalition recently released a report advocating for a stronger domestic supply chain to manufacture components in the US. Carr also stressed the importance of the Treasury Department recognizing that their current domestic content bonus guidance reinforces the uneven playing field. He emphasized the need to break China's monopoly on wafer supply to establish a sustainable solar manufacturing sector in the US.
Auxin’s AD/CVD solar investigation
In February 2022, California-based solar manufacturer Auxin Solar requested the US Department of Commerce (DOC) to investigate whether companies in Southeast Asia were bypassing duties on cells and modules imported from China. This request followed the DOC's rejection of a previous petition, citing petitioner anonymity. Auxin Solar sought anti-circumvention inquiries into assemblers of crystalline silicon PV (CSPV) cells and modules in Malaysia, Thailand, Vietnam, and Cambodia, alleging the use of affiliated Chinese input suppliers and a fully integrated Chinese supply chain to circumvent the orders. The DOC initiated the investigation in March 2022.
During the ongoing investigation, President Biden waived tariffs on solar imports from Southeast Asia in June 2022 for a period of two years, until June 2024, to promote renewable energy deployment in the US. The move was praised by the US solar lobby, which vigorously opposed the investigation.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), welcomed the intervention as a "much-needed reprieve from this industry-crushing probe."
Later in 2022, the DOC revealed that some PV cells and modules from four Southeast Asian countries were circumventing AD/CVD orders on solar cells and modules from China. Over 20 companies were found to be evading tariffs, with only four not circumventing them: New East Solar (Cambodia), Hanwha Qcells (Malaysia), JinkoSolar (Malaysia), and Boviet Solar Technology (Vietnam).
In January 2023, US lawmakers from both parties in the House of Representatives issued a resolution to repeal the waiver on solar import tariffs from Southeast Asia under the Congressional Review Act. Congressman Dan Kildee emphasized the need to support US solar manufacturing and reduce dependence on China as the rationale behind the resolution.
The resolution passed in both chambers, with the US Senate approving it in May. However, President Biden vetoed the proposal, overturning the removal of the waiver.
This decision followed a letter from over 400 US solar companies to Congress, advising against the repeal of the waiver. They warned that revoking the waiver would result in over US$1 billion in retroactive duties on imports for 2022-23 and lead to the cancellation of approximately 4GW of planned projects this year, according to SEIA data.
‘Can you get your modules into the country?’
In August 2023, a subsequent ruling found that five solar PV manufacturers had circumvented import tariffs by relocating minor parts of their supply chains to Southeast Asia. The US Department of Commerce's (DOC) final determination on the AD/CVD tariffs revealed that Trina Solar, Canadian Solar, BYD Hong Kong, New East Solar, and LONGi-owned Vina Solar had been routing some of their products through Thailand, Cambodia, and Vietnam for "minor processing" before shipping them to the US.
Following this ruling, renewables consulting and research company Exawatt highlighted the potential long-term impact of the Uyghur Forced Labour Prevention Act (UFLPA) on pricing, surpassing the effects of the AD/CVD ruling. Alex Barrows, head of PV at Exawatt, emphasized the significance of navigating the UFLPA and ensuring compliant entry of modules into the US.
In late December, Auxin filed a lawsuit against the DOC and the US Customs and Border Protection (CBP) regarding the AD/CVD waiver. The lawsuit alleged that these entities had failed to collect payments and credits related to the AD/CVD tariffs on solar imports.
Source: PV Tech
