The U.S. Department of Commerce will open an investigation into whether Chinese solar-equipment manufacturers are evading tariffs by sending components to other Asian nations for assembly before shipping finished products to the U.S.
The U.S. Commerce Department plans to take up the investigation, Auxin Solar Inc. said in a statement March 28.
“For years, Chinese solar producers have refused to fairly price their products in the U.S. and have gone to significant lengths to continue undercutting American manufacturers and workers by establishing circumventing operations in countries not covered by those duties,” said Auxin Solar CEO Mamun Rashid. He said he was grateful that Commerce officials “recognized the need to investigate this pervasive backdoor dumping and how it continues to injure American solar producers.”
In a statement, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA) criticized Auxin for pursuing what she called the “self interests of one company.” Commerce Department rules allow petitions from single entities and even from non-American interests. She said “The mere threat of tariffs altered the industry’s growth trajectory and is one of the reasons why we’re now expecting a 19% decline in near-term solar forecasts.” She said that “Taking up this case will have a chilling effect on the solar industry” and predicted it could lead to market volatility and job losses.
The decision comes after Auxin petitioned Commerce to investigate. Earlier in March, Senators Rob Portman (R-OH) and Sherrod Brown (D-OH), and U.S. Representatives Bill Pascrell, Jr. (D-NJ) and Brad Wenstrup (R-OH), led bipartisan letters in both the Senate and House to Commerce Secretary Gina Raimondo urging her to accept the anti-circumvention petition.
The Coalition for a Prosperous America said it supported the decision is launch a circumvention investigation. It said such inverstigations have become “commonplace,” especially on AD/CVD orders involving imports from China. It said the Department of Commerce earlier in March launched its own inquiry concerning quartz surface products that are assembled in Malaysia using Chinese inputs.
On March 24, Auxin filed an update with officials alleging that solar cells and module imports were surging ahead of the Commerce Department decision.
Auxin called recent import levels a “flood” and represented “a naked attempt by these exporters to double-down on their circumventing behavior and to stockpile solar cells and modules in an effort to continue avoiding anti-dumping and anti-circumvention (AD/CVD) liability.
It cited a recent Commodity Status Report from U.S. Customs and Border Protection that showed imports so far this year totaled 1.8 GW of capacity, including 1.6 GW imported in a single week. The filing said that imports didn’t reach similar levels in 2021 until 38 weeks into the year.
The filing said the surge corresponds with Auxin’s initial filing of its petition in early February. It also said that imports from Malaysia, Thailand, Vietnam, and Cambodia made up an “enormous volume” of imports during the period.
“Commerce should not tolerate such blatant attempts to evade duty liability,” the filing said.
A surge in imports was not surprising. Now that Commerce has taken up the case, any duties it may impose would be retroactive to the date when it opened its investigation. That means modules brought into the U.S. prior to that date would be exempt, including those in the alleged “surge.”