Solar panel import duties

Solar panel import duties

February 28, 2022 | By Keith Martin in Washington, DC

US import tariffs on solar cells and panels could remain a battleground into the summer.

Opinions differ about whether the US Department of Commerce is likely to proceed to an investigation phase after Auxin Solar Inc. asked Commerce to impose anti-circumvention duties on solar panels assembled in Malaysia, Thailand, Vietnam and Cambodia using Chinese components. The agency has in theory until March 25 to decide, but may take more time.

Any duties could apply retroactively to panels imported as far back as November 4, 2021. Another possible retroactive date is February 8, which is the date Auxin filed the petition.

The US has been collecting countervailing and anti-dumping duties on solar panels imported directly from China since December 2012 to offset the effects of Chinese export subsidies and of Chinese manufacturers dumping product on the US market at lower prices than the panels are sold for in China.

US duties vary depending on the panel supplier. The China-wide rates are 238.95% in anti-dumping duties and 17.10% in countervailing duties. Some companies qualify for lower rates after presenting evidence to Commerce.

JA Solar and Risen panels are subject to countervailing duties of 18.49% and 15.71%, respectively.

Jinko and Risen solar panels are subject to anti-dumping duties of 32.69% (although Jinko panels appear to be being blocked by US Customs due to forced labor concerns). Anti-dumping duties of 23.17% are being collected on panels from JA Solar, Suntech, LONGi and six other Chinese manufacturers.

These are the preliminary subsidies that Commerce found various Chinese suppliers benefited from on panels imported during the period December 2019 through November 2020 and preliminary dumping margins for calendar year 2019, the most recent years under review. The final figures are not expected to vary significantly.

Importers must post cash deposits when the panels pass US Customs.

Adjustments are made to the cash deposits as Commerce revisits the dumping margins and export subsidies over time. In such cases, importers may be required to pay more or receive refunds.

Auxin said in its petition that the four southeast Asian countries accounted for more than 79% of US solar panel imports in 2021. US government figures are 81%, not including Cambodia.

Less than 1% of US solar panels came directly from China in 2021.

Meanwhile, the US House of Representatives voted in early February to require Commerce to look into circumvention concerns whenever an interested party files a petition and to make a decision on an accelerated timetable. The language is part of a sweeping America COMPETES Act aimed at boosting American competitiveness with China. The bill the House passed must now be reconciled with a different measure the Senate passed in June last year and that lacks the anti-circumvention language.

Separately, President Biden decided in early February to extend existing “safeguard” tariffs on imported solar panels for another four years at an initial rate of 14.75% for the period February 7, 2022 through February 6, 2023, falling to 14%, at the rate of 0.25% a year, by the last year of the four-year period.

However, he exempted bi-facial solar panels, which make up a growing share of US panel imports, from the duties.

He also increased the volume of crystalline silicon solar cells not yet assembled into panels that can enter duty-free from 2,500 megawatts to 5,000 megawatts a year.

The safeguard tariff does not apply to panels imported from a list of 99 developing countries, including Brazil, Cambodia and Indonesia. President Trump withdrew developing country status from India in May 2019.

The US Trade Representative can withdraw the exemption for a developing country if its share of total panel imports exceeds 3%. Auxin asserted in its anti-circumvention petition that Cambodia supplied more than 3% of US solar panels in 2021. The trade representative can also suspend the exemption for all developing countries if the share of total imports from countries with less than a 3% import share exceeds 9% of total imports.

Biden directed the US Trade Representative to enter into negotiations with Mexico and Canada to exempt imported solar panels from those two countries from the safeguard tariff.

A dispute settlement panel operating under the US-Mexico-Canada trade agreement found in early February that President Trump violated the agreement by collecting import duties on solar panels imported from Canada after the US International Trade Commission concluded that Canadian solar panel imports were not harming US panel manufacturers.

The US has until March 18 to drop the tariffs on Canadian panels or Canada can impose retaliatory tariffs on American goods of comparable value.

Canada said its solar panel exports to the United States have declined by 82% since the tariffs were originally imposed in 2018. The decision by the dispute settlement panel does not apply to Mexico because the US International Trade Commission found that Mexican panel exports to the US could harm US manufacturers.

The US collected close to $2.8 billion in duties on imported solar panels over the four years of the Trump administration.