Background to the AD/CVD Saga
The second quarter of 2023 brought forth a renewed debate surrounding the issue of antidumping/countervailing duty (AD/CVD) import tariffs in the United States. These tariffs have faced opposition within the US government, sparking ongoing discussions and deliberations.
The AD/CVD saga has been unfolding over the course of several years. It commenced with an investigation based on allegations made by Auxin Solar, which ultimately found several Chinese-owned solar manufacturers guilty of circumventing US import tariffs by relocating certain aspects of their operations to Southeast Asia. In response to these findings, President Joe Biden issued an executive order that temporarily waived the AD/CVD tariffs on these imports until mid-2024. At that time, approximately 80% of the US solar supply originated from operations in Southeast Asia.
Efforts to Repeal Biden's Waiver
In April 2023, Congress contemplated voting to repeal Biden's waiver and reinstate the tariffs. This prompted a coalition of over 400 US solar companies, spearheaded by the Solar Energy Industries Association (SEIA), to send a letter urging Congress to uphold the waiver. The purpose of the waiver was to provide the US solar industry with sufficient time to prepare for the potential impacts of the tariffs. According to the SEIA, these impacts could amount to retroactive duties totaling US$1 billion, as well as the cancellation of projects with a combined solar capacity of 4GW.
Despite incentives offered by the Inflation Reduction Act, the industry was still in the early stages of establishing a significant domestic photovoltaic (PV) supply. This remains true even today. Both the SEIA and a bipartisan group in Congress advocating for the enforcement of the duties emphasized the importance of protecting "American interests." The SEIA argued that the US energy transition and the growth of its solar industry would be hindered by the tariffs just as momentum was beginning to build. On the other hand, lawmakers asserted that allowing the influx of cheap, seemingly Chinese-made modules was undermining American businesses and the re-emerging US manufacturing sector.
Presidential Veto Maintains the Waiver
Following passage in Congress, the vote made its way to the House of Representatives and the Senate before reaching President Biden's desk. Ultimately, President Biden exercised his veto power, thereby preserving his waiver and ensuring that it remains in effect until next year.
In conclusion, the ongoing debate regarding AD/CVD import tariffs in the US reflects the complexity and significance of this issue for various stakeholders. As the solar industry continues to evolve, finding a balance between protecting domestic interests, promoting manufacturing sector growth, and supporting the nation's energy transition remains a challenging task that requires careful consideration.
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