CPA Urges Commerce to Investigate Illegal Chinese Circumvention

WASHINGTON — The Coalition for a Prosperous America (CPA) released a statement in support of a petition filed by Auxin Solar, Inc., a U.S. headquartered company that manufactures solely in America, requesting that the U.S. Department of Commerce close a loophole that is being exploited by Chinese companies operating in Malaysia, Thailand, Vietnam, and Cambodia to circumvent existing antidumping and countervailing (AD/CVD) duty orders on solar cells and modules from China. Unlike last week’s extension of the 201 solar safeguard tariffs, which was a political decision before the White House, the Department of Commerce’s investigation of claims of illegal circumvention is historically routine and is based on long-standing U.S. law.

Last year, CPA supported a group of American solar manufacturers that requested a circumvention ruling. Although the Department of Commerce rejected that request due to the anonymity of the companies and because the allegation did not assert country-wide circumvention, Auxin Solar’s petition cures those defects. Circumvention investigations have become commonplace, especially on AD/CVD orders involving imports from China with the Department of Commerce self-initiating an inquiry last week concerning quartz surface products that are assembled in Malaysia using Chinese inputs.

“Faced with strong evidence that Chinese solar companies are circumventing AD/CVD duties that were lawfully imposed on Chinese solar cells and modules, it is abundantly clear that the Department of Commerce should initiate an investigation,” said Zach Mottl, Chairman of CPA. “CPA strongly supports the robust enforcement of U.S. trade law and we believe that strong enforcement of these AD/CVD orders is necessary, otherwise American manufacturers have no protection from China’s unlawful, predatory trade practices.”

Last week, CPA heavily criticized the Biden administration’s decision to exclude bifacial solar panels in its extension of the Section 201 solar safeguard tariffs — a move that Bank of America bluntly and accurately called out as rendering the tariffs “largely toothless.” The decision was an outright rejection of the U.S. International Trade Commission’s (ITC) unanimous and bipartisan recommendation that the 201 tariffs should be extended and include bifacial solar products. CPA outlined why this type of 201 extension would decimate U.S. solar manufacturers and “will result in factory closures in the U.S., the loss of American jobs, and at least 10 GW of planned manufacturing capacity will likely be canceled.”

“After the Biden administration gutted the 201 solar safeguard tariffs, it is inconceivable that the Department of Commerce would ignore this petition and prevent an investigation from taking place,” continued Mottl. “As a result of the Biden administration’s toothless 201 extension, American manufacturers have no protection from China’s unlawful, predatory trade practices and the incoming tsunami of Chinese imports. The Department of Commerce should investigate unlawful Chinese circumvention and ignore the fear mongering of those who wish to continue to import Chinese solar made with forced labor and dirty coal.”

If the Department of Commerce initiates an investigation, CPA believes it is important that non-Chinese-headquartered companies that are not circumventing are given a meaningful opportunity to defend themselves, either by granting them their own non-circumvention ruling or allowing them to certify the facts that show they are not circumventing. For example, non-Chinese solar companies that manufacture in the U.S. have announced plans to make investments to reshore the solar supply chain. CPA opposes any action that jeopardizes this investment and plans to reshore the solar supply chain to the U.S.

“President Biden campaigned on creating 10 million clean energy jobs, which is why it is critical that the Department of Commerce take into account American manufacturers that have plans to shift supply chains out of Southeast Asia and back to the U.S.,” said Michael Stumo, CEO of CPA. “The Chinese currently have a stranglehold on key solar inputs, but American manufacturers have plans to make massive investments in the U.S. to reduce or eliminate America’s dangerous reliance on Chinese imports. The decision facing the Biden administration is whether it will be responsible for creating clean energy jobs here in America, or in Chinese-controlled factories.”

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