Biden’s Solar Emergency Declaration Still Protecting Illegal Chinese Trade Activity
WASHINGTON — The Coalition for a Prosperous America (CPA) today released a statement after the Department of Commerce issued a final determination in its investigation that found that Chinese companies operating in Malaysia, Thailand, Vietnam, and Cambodia are illegally circumventing existing antidumping and countervailing (AD/CVD) duty orders on solar cells and modules from China. Unfortunately, the Biden administration’s Solar Emergency Declaration, which is still in place until June 2024, is protecting China’s illegal trade activity and rewarding the Chinese backed cheaters.
Despite bipartisan opposition and the Commerce Department’s investigation, the Biden administration has not repealed this harmful rule. Earlier this year, Democrats and Republicans in both the House and Senate voted to repeal the Biden administration’s Solar Emergency Declaration using the Congressional Review Act (CRA). CPA strongly supported this bipartisan legislation. In December, Commerce preliminarily determined that Chinese companies operating in Malaysia, Thailand, Vietnam, and Cambodia are illegally circumventing existing AD/CVD duties.
Commerce’s Final Ruling Leaves Massive Loophole that Benefits the Chinese
Commerce’s final determination leaves in place a loophole that will allow Chinese solar manufacturers to avoid existing AD/CVD duties indefinitely, barring any future cases brought by the U.S. domestic industry. The final determination allows China to avoid future duties by constructing wafer facilities outside of China—something the Chinese are doing right now. It takes roughly 18 months to build a wafer facility, which is why the Biden administration chose to suspend tariffs for two years via its Solar Emergency Declaration.
Earlier this month, Senator Sherrod Brown (D-OH) urged Commerce Secretary Gina Raimondo to address this loophole in Commerce’s final determination. In his letter, he outlined his concerns that the final determination “may exclude solar wafers from consideration. In effect, if the wafers are made outside of China, but produced with Chinese polysilicon and other inputs, by Chinese companies benefiting from state-funded subsidies, they can be excluded from the broader circumvention finding.”
“The White House should be absolutely ashamed that, despite its own Commerce Department determining that the Chinese are illegally violating U.S. trade law, it remains intent on protecting China’s predatory activity and rewarding their cheating,” said Zach Mottl, Chairman of CPA. ”We applaud the career officials at the Commerce Department for independently reviewing the facts of this case, which clearly show that China is illegally violating U.S. trade law to the detriment of American manufacturers and American workers.
“However, instead of facing accountability for their actions, Chinese companies will face zero repercussions for their illegal trade activity thanks to President Biden’s Solar Emergency Declaration,” continued Mottl. “Because of that harmful rule, Chinese companies are free to continue to flood the U.S. market with no repercussions indefinitely. Not only does this make a mockery of our trade laws, but it undercuts the IRA’s policies to boost domestic solar manufacturing. If the White House continues to do the bidding of Beijing and openly work against U.S. trade laws, the tens of billions of dollars in investment as a result of the IRA could disappear just as quickly as they were announced.”
Ignoring U.S. Trade Laws Will Jeopardize Investment from the Inflation Reduction Act
Earlier this year, CPA’s Economics Team released a report analyzing China’s actions after the passage of the American Recovery and Reinvestment Act (ARRA) that forced the closure of numerous U.S. solar manufacturing facilities between 2011–2014. Despite ARRA’s 30% tax credit for investment in clean energy manufacturing facilities, China’s plan to undermine it worked.
To ensure that history does not repeat itself, it is critical that the Biden administration enforce U.S. trade law. Currently, Chinese manufacturers are artificially lowering their prices while simultaneously announcing massive expansions in capacity. By making investments at a vast scale and by lowering the cost of their components to unprofitable levels, Chinese manufacturers are once again shifting the solar market to suffocate any potential competitors, including U.S. solar manufacturers.
