Good News to China's Solar Sector: Biden Suspends Tariffs on Southeast Asia for 24 Months

The U.S. Commerce Department is investigating whether Chinese companies are circumventing decade-old duties by assembling equipment in four Southeast Asian countries.

BEIJING, June 6 (TMTPOST)— The Biden administration just sent a positive signal to China’s solar industry.

Source: Visual China

In an emergency declaration to exist with the respect to the threats to the availability of sufficient electricity generation capacity to meet expected customer demand announced on Monday, the U.S. President Joe Biden asked the Secretary of Commerce to consider a 24-month temporary extension of time and duty-free importation of certain solar cells and modules exported from the Kingdom of Cambodia, Malaysia, the Kingdom of Thailand, and the Socialist Republic of Vietnam. The federal government is working with private sector to promote domestic solar manufacturing capacity of modules and other inputs in the solar supply chain, but building that capacity will take time, so immediate action is needed to ensure in the interim that the United States has access to a sufficient supply of solar modules to assist in meeting our electricity generation needs, according to the announcement.  As parts of the new executive action, the White House also announced that Biden invoked the Defense Production Act in the 1950s to expand domestic production of solar panel parts, building insulation, heat pumps, and more, and the federal government is leveraging its purchasing power to support American clean energy manufacturers.

The tariff suspension is obviously good news to Chinese solar panel manufactures as the U.S. Department of Commerce has launched an investigation in late March to learn whether these companies are circumventing decade-old duties by assembling equipment in the abovementioned four Southeast Asian countries, which effectively paralyzed the U.S. solar sector since the investigation froze 80% of U.S. solar panels imports and more than half of supplies. And the disruptive effects of the investigation would have lasted months, if President Biden didn’t grant the tariff exemption, as the Commerce is expected to report preliminary findings by late August.

A day before Biden’s declaration, the Secretary of Commerce Gina Raimondo suggested the U.S. government mulled giving some relieves from tariffs on China. Removing tariffs on products other steel and aluminum, such as household goods and bicycles, “may make sense”, Gina answered a question about if the United States would weigh ending duties on imports from China in a CNN interview on Sunday.

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