House Advances Bill to Repeal 2-Year Delay of AD/CVD on SE Asia Solar

A resolution that would overturn the Biden administration’s two-year delay of antidumping and countervailing duties on solar cells and panels from Southeast Asia passed out of the House Ways and Means Committee 26-13 on April 19.

The delay “has sent a signal that there will be less, not more accountability for unfair trade practices that have given China a dominant position in solar panel production, despite longstanding American innovation in this sector,” said Ways and Means Chairman Jason Smith, R-Mo., in remarks prior to the vote. “That is why this committee is acting today to reverse that decision.”

The two-year grace period for Commerce’s preliminary determination of circumvention by solar imports from Cambodia, Malaysia, Thailand and Vietnam (see 2212020064) was announced by President Joe Biden in a proclamation issued in June 2022 (see 2206060036) and finalized by Commerce in September (see 2209160065).

The Congressional Review Act resolution would prevent Commerce’s final rule from having any effect, and prevent Commerce from issuing any similar final rule, said Joshua Snead, chief trade counsel for Ways and Means, during the mark-up. If enacted, which would require a two-thirds majority in the House and Senate presuming Joe Biden’s veto, the duties would take effect retroactively for imports beginning in April 2022, Snead said.

Republicans on the committee all voted in favor of advancing the resolution.

Biden “decided to subvert U.S. trade law by issuing an emergency proclamation that declares all imports, even those found to be circumventing, will not be subjected to tariffs until June of 2024,” Rep. Brad Wenstrup, R-Ohio, said. Promoting solar energy “doesn't mean we should provide special treatment for unfairly traded solar panels that rely on supply chains dominated by our adversaries,” he said.

Only one Democrat, Terri Sewell of Alabama, voted to advance the bill, though Rep. Dan Kildee, D-Mich., who co-sponsored it, was out recovering from surgery after a recent cancer diagnosis, and ranking member Rep. Richard Neal of Massachusetts and Reps. Lloyd Doggett, D-Texas, and Bill Pascrell, D-N.J., also were absent from voting. Pascrell also is a co-sponsor of the resolution.

“Fair trade is important and climate change is real and addressing it is also important, but we cannot be short-sighted in our efforts as we rely on foreign companies and countries to meet our energy or climate goals, especially when they have been in violation of U.S. trade laws,” Kildee said in an emailed statement.

Sewell said at the mark-up: “I agree that climate change is an immediate threat and that we must do all that we can to rapidly transition to renewable energy sources like solar. … At the end of the day, this resolution is about enforcement of our trade laws.”

Many Democrats who weighed in at the mark-up said eliminating the grace period and reinstituting the AD/CVD would counteract solar incentives in the Inflation Reduction Act just as installations are rising.

Rep. Mike Thompson, D-Calif., said: “We can't afford to kneecap this effort right out of the gate. The fact of the matter is, the U.S. domestic solar industry cannot at this time meet demand. Our domestic market is saturated. If we're going to deploy solar energy rapidly, the way we need to, the reality is that Americans need short-term access to imported solar panels.” Domestic producers can’t ramp up production as fast as needed, and the delay creates a “glide path that allows for fast deployment of solar energy in the short term, while domestic manufacturers build out capacity,” Thompson said.

Said Trade Subcommittee ranking member Earl Blumenauer, D-Ore.: “The Inflation Reduction Act has already led to the announcement of more than 45 gigabytes of domestic solar capacity, some of which comes from districts represented on this committee on both sides of the aisle. Supply chains don't change locations overnight. Ending the president's temporary ban would immediately institute these high retroactive tariffs in the hundreds of percent, which would hurt solar development, increase energy costs and lead to a supply reduction at exactly the time we need to ramp up production.”

Reversing the grace period “is not the right solution at this time,” said Rep. Judy Chu, D-Calif. “While the administration's emergency order is not perfect, it is a short-term intervention that gives solar projects in the pipeline that need it a bridge,” she said.

“Domestic manufacturers are sold out years in advance and the backlog only continues to grow,” said Rep. Don Beyer, D-Va. “So the much larger installation industry is forced to look elsewhere” to “make up the difference and fill current demand,” Beyer said. That imbalance was addressed by the Inflation Reduction Act with tax incentives, he said. “The pause on tariffs on imported panels was intended to give the industry the time it needs to transition … .”

One Republican cited environmental concerns in arguing for reversing the grace period and imposing the tariffs.

Rep. David Schweikert, R-Ariz., cited an “academic article” he read that said “it takes eight to 10 years of production of these Chinese solar panels to offset the amount of greenhouse gases because they're made with very, very, very dirty, coal-based energy, without scrubbers.” He said: “If it's about the environment, you need a very different scoring system than just lifting these tariffs, because you're bringing in products that were made in filthy energy-based production.”