On Friday, the U.S. House of Representatives voted in favor of reversing President Joe Biden’s decision to suspend tariffs on solar panels from Cambodia, Malaysia, Thailand, and Vietnam. These countries provide a significant proportion of the country’s supply of solar panels.
Last year, the White House implemented a waiver on solar panel import tariffs from Cambodia, Malaysia, Thailand, and Vietnam for a period of two years. The waiver was coupled with the use of the Defense Production Act to strengthen the production of domestic solar panels.
The suspension of tariffs was intended to ensure a steady supply of solar panels as the United States increases its capacity in solar energy, which is a crucial step in achieving the White House’s climate objectives.
During a Commerce Department investigation into whether companies were avoiding tariffs on Chinese solar products shipped to the US, President Biden imposed the moratorium. Eight solar companies were accused of manufacturing solar cells and components in China, then sending them to Cambodia, Malaysia, Thailand and Vietnam for minor processing before exporting them to the US, in an attempt to bypass US duties. The Commerce Department found that four of the companies were trying to avoid paying US duties by doing minor processing in one of the Southeast Asian nations.
Advocates of the House resolution contend that the country is excessively reliant on other countries such as China for renewable energy, and therefore should enforce trade regulations that will promote the country’s domestic solar supply chains.
The resolution to restore solar panel tariffs was approved by the U.S. House of Representatives in a 221-202 vote, with most Republicans and 12 Democrats in favor. The bill now awaits review by the Senate. However, President Biden has vowed to veto any congressional attempts to repeal the solar tariff suspension, which can only be overturned with a two-thirds majority in the Senate.
The Solar Energy Industries Association estimates that lifting the two-year moratorium could result in U.S. solar developers being hit with retroactive tariffs amounting to $1 billion. The industry group also estimates that the legislation could cause the loss of 30,000 jobs and $4.2 billion in domestic investment.
In a statement, Abigail Ross Hopper, the President and CEO of SEIA, mentioned that the U.S. is unable to manufacture sufficient solar panels and cells to meet the current demand. Hopper also pointed out that the remaining months of Biden’s moratorium could help the country bridge this gap.
Hopper said that the U.S. has the potential to become a global leader in clean energy manufacturing and development. However, overturning the moratorium at this stage could jeopardize that future. According to Hopper, the remaining months of Biden’s moratorium provide the country with the time it needs to close the gap in the domestic supply of solar panels and cells.
As part of its broader objective to achieve a zero-carbon energy system by mid-century, the Biden administration has revealed its plans to have solar energy generate nearly half of the country’s electricity by 2050. The administration aims to attain an emissions-free grid by 2035.
In a statement, CEO of the American Clean Power Association Jason Grumet said that imposing retroactive tariffs on U.S. companies would cause harm to the current progress and would once again surrender ground to China and other countries.
