New AD/CVD Duties Needed to Combat China’s Illegal & Harmful Trade Practices in Vietnam, Malaysia, Cambodia, and Thailand
WASHINGTON — The Coalition for a Prosperous America (CPA) today released a statement in strong support of a new set of antidumping and countervailing duty (AD/CVD) petitions filed with the U.S. International Trade Commission (USITC) and the U.S. Department of Commerce to investigate potentially illegal trade practices by Cambodia, Malaysia, Thailand, and Vietnam that are injuring the U.S. solar industry. The petitions were filed by major U.S. solar manufacturers across the nation, including Convalt Energy, First Solar, Meyer Burger, Mission Solar, Qcells, REC Silicon, and Swift Solar. A recent analysis by the CPA Economics Team warned that the U.S. solar industry is being threatened by China’s overcapacity and that China’s solar companies are surviving on CCP subsidies.
The companies subject to this investigation would be primarily Chinese-headquartered companies. For more information on this petition, visit AmericanSolarTradeCmte.org.
CPA strongly supported a previous AD/CVD case filed by Auxin Solar where the Commerce Department determined that Chinese companies operating in Malaysia, Thailand, Vietnam, and Cambodia are illegally circumventing. The case was strongly opposed by the Solar Energy Industries Association (SEIA), which was exposed as a front for Chinese solar companies. In a scathing report, The American Prospect exposed SEIA as failing to “disclose that among its leading members are the same Chinese-owned companies that are implicated not only in the investigation of illegal tariff evasion, but in the use of slave labor to produce solar components and coal-fired energy to power the factories.” Additionally, The American Prospect unmasked that SEIA’s “main strategy for the past ten years has been to lament restrictions on Chinese solar production.”
“On behalf of our member companies that are committed to producing and investing in America, we strongly support this new trade case to combat China’s illegal, predatory activity that directly harms American manufacturers and workers,” said Michael Stumo, CEO of CPA. “For more than three years, the Biden administration’s trade policy has harmed U.S. solar manufacturers and allowed China to cement its dominance of the global marketplace. Despite the passage of the Inflation Reduction Act, the Biden administration’s decision to allow China to continue its illegal circumvention for 24 months has proven to be disastrous—giving China the opportunity to overproduce and flood the U.S. market.”
Earlier this year, President Biden vetoed bipartisan, bicameral legislation to repeal the Solar Emergency Declaration that allows China to illegally circumvent for 24 months.
“In order to grow a strong, domestic solar supply chain, China’s overcapacity and dumping on the U.S. market must be addressed,” continued Stumo. “While this case is a good step forward, the Biden administration and Congress have an important role to play in implementing a pro-American trade policy that counters China’s illegal, predatory activity. This should include reinstating 201 tariffs on bifacial panels from China, a strong domestic content bonus rule under the Inflation Reduction Act, and prohibiting Chinese companies from benefiting from Inflation Reduction Act tax credits.”
Last year, CPA applauded U.S. Senator Marco Rubio (R-FL) and U.S. Representative Carol Miller (WV) for introducing the Protecting Advanced American Manufacturing Act, bicameral legislation that would prohibit firms in China, and other U.S. foreign adversaries, from receiving taxpayer credits in the Inflation Reduction Act (IRA). Specifically, the bill would prohibit any company from receiving Section 45X tax credits in the IRA that is owned, controlled by, operated by, under the substantial influence of, or organized under the laws of a foreign adversary.
Background from the American Solar Trade Committee
This action comes less than a year after the U.S. Department of Commerce made its final determination that Chinese solar manufacturers were circumventing tariffs on solar cells and solar panels by shipping their products through Cambodia, Malaysia, Thailand, and Vietnam. However, the administration imposed a two-year moratorium on these tariffs, giving the Chinese-owned solar manufacturers in these countries time to shift their supply chains. Companies found to be circumventing the tariffs are not expected to pay tariffs when the moratorium ends in June 2024, because their Southeast Asia-based supply chains mean they are no longer in technical violation as outlined in the circumvention decision.This new trade case is required to address the unfair trade practices by these solar manufacturers in Cambodia, Malaysia, Thailand, and Vietnam.
The alleged dumping and subsidization of products made in Southeast Asia to avoid U.S. trade rules has led to a historic glut of solar panels believed to be sold at prices below the cost of production. The International Energy Agency (IEA) reports that there is a year and a half of stockpiled panels in American warehouses. Imports into the U.S. exceeded installations in 2023 by more than 25 gigawatts, and prices have fallen by more than 50 percent in that time. This anti-competitive, market-distorting behavior undermines the level playing field necessary for U.S. solar manufacturers to compete on their own merits.
The cases come on the heels of U.S. Treasury Secretary Janet Yellen’s recent remarks that “China’s overcapacity distorts global prices and production patterns and hurts American firms and workers.” Chinese-owned companies’ global market share in solar products is more than 80 percent. The current environment, if left unaddressed, threatens America’s ambitions of building a domestic solar manufacturing supply chain and mitigating the risk of an overreliance on Chinese solar.
Convalt Energy, First Solar, Meyer Burger, Mission Solar, Qcells, REC Silicon, and Swift Solar are leading companies in the 34,000-worker strong solar manufacturing industry, with plans to add tens of thousands more good-paying, long-term jobs to the U.S. economy in the coming years. These collective investments are critical to hitting U.S. climate goals. Cornell University found that onshoring the solar supply chain could cut 30 percent of global solar manufacturing emissions. According to a study by the Blue Green Alliance, if all U.S. developers sourced 55 percent of their manufactured solar goods domestically, the solar manufacturing industry would support 900,000 jobs by 2035.
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