The U.S. Department of Commerce has announced preliminary determinations in a recent circumvention case tied to solar cells and modules originating from China, finding that some companies have been attempting to dodge U.S. trade laws.
Auxin Solar had initiated a complaint alleging that eight solar companies that manufacture solar cells and modules are manufacturing components in China and then sending those cells and modules to Cambodia, Malaysia, Thailand or Vietnam for minor processing before being exported to the U.S.: actions that Auxin Solar says are an effort to evade existing antidumping duty (AD) and countervailing duty (CVD) orders on solar cells and modules from China.
The Commerce department’s preliminary determination found that Canadian Solar, BYD Hong Kong, Trina Solar and Vina Solar are all circumventing U.S. law, attempting to bypass U.S. duties by performing processing in another country before shipping to the U.S.
The department notes that some companies in Malaysia, Thailand and Vietnam did not respond to Commerce’s request for information in the investigation and will, in turn, be found to be circumventing.
Commerce is making a “country-wide” circumvention finding, which designates the country as one through which solar cells and modules are being circumvented from China. This determination does not constitute a ban on imports from those countries. Companies in these countries will be permitted to certify that they are not circumventing the AD/CVD orders, in which case the circumvention findings will not apply.
New East Solar, Hanwha, Jinko Solar and Boviet Solar were all found to have not been circumventing AD/CVD orders. Commerce intends to take no action, as long as their production processes and supply chains do not change.
The department notes that the findings are preliminary. As a next step, Commerce will conduct in-person audits in the coming months to verify the information that was the basis of its finding. Furthermore, all parties will have an opportunity to comment on Commerce’s finding, which the department will fully consider before issuing its final determination, which is currently scheduled for May 2023.
The American Clean Power Association (ACP) says the determination is “a step backward.”
“This decision upends a decade of precedent that Commerce itself established, undercutting any sense of business certainty that American companies rely on to continue investing in America’s clean energy future and impacting our ability to reduce our dependence on foreign energy sources,” comments ACP Interim CEO and Chief Advocacy Officer JC Sandberg.
“American solar companies are making critical 2024 procurement decisions now,” Sandberg explains, saying that Commerce’s decision “casts greater uncertainty about the future of the solar industry in the U.S.”
“It could also undermine the impact of the Inflation Reduction Act, harming domestic manufacturing and endangering good-paying jobs across the country,” he adds.