Washington must support U.S. solar makers, not China
President Biden is hoping to incentivize a major boost in American solar production. And thanks to the Inflation Reduction Act’s tax credits, domestic manufacturers are already planning billions of dollars worth of new solar investments in the United States. Unfortunately, the Biden administration may now be putting this investment in jeopardy. That’s because the president has issued an “emergency declaration” that allows Chinese solar makers to continue illegally avoiding U.S. tariffs. Both Democrats and Republicans in Congress consider this a mistake–and have introduced a bipartisan resolution to overturn it.
In 2018, the Trump administration imposed tariffs on Chinese solar panels being sold in the U.S. at less than fair-market value. Once the tariffs were in place, U.S. manufacturers built new factories–and solar prices actually dropped.
To avoid these tariffs, however, Chinese companies started selling solar panels through other countries. In 2022, the Department of Commerce investigated the problem, and determined that four Chinese companies were deliberately routing solar cells and modules through Malaysia, Thailand, Vietnam, and Cambodia in order to avoid U.S. tariffs.
Some of these Chinese solar companies–including TrinaSolar and LONGi–have also been identified as using forced labor to obtain raw materials. Under federal law, goods produced through forced labor in Xinjiang, China are forbidden to enter the United States.
There’s little justification for the U.S. to import deliberately underpriced solar panels from China–particularly ones made with forced labor. That’s why tariffs are a necessary response. However, the administration’s solar declaration means that China’s solar manufacturers–the very ones found to be violating America’s trade laws–will have a free pass to avoid U.S. tariffs for the next two years.
Why would the administration do this–when the Commerce Department’s preliminary investigation found that Chinese solar manufacturers have been “dumping” heavily subsidized product in the U.S. to put America’s solar companies out of business?
In his emergency declaration, the president claimed that the U.S. has been “unable to import solar modules in sufficient quantities” to meet his timetable for solar panel deployment. But the reality is that the president’s emergency declaration came after intense lobbying from the Solar Energy Industries Association (SEIA), a trade group that represents a number of Chinese solar manufacturers.
Last year, the Commerce Department announced that it was investigating three of SEIA’s Chinese members for illegal trade activity, including forced labor. SEIA’s membership includes U.S. subsidiaries of such major Chinese producers as JinkoSolar, JA Solar, TrinaSolar, BYD, and LONGi Solar.
The bipartisan legislation introduced to repeal President Biden’s solar declaration represents an important effort to stand up to lobbying by China–particularly SEIA and the Chinese manufacturers currently under investigation by the Commerce Department.
Congress is right to stand up for America’s solar manufacturers–and hold China accountable for illegally violating U.S. trade laws. The House and Senate should swiftly pass this bipartisan legislation–and ensure that the administration’s free pass for Chinese companies is revoked.
Michael Stumo is CEO of the Coalition for a Prosperous America, a nonprofit, nonpartisan organization with the mission to advocate for strategic trade, tax and growth policies.