Chinese Solar Makers Evaded U.S. Tariffs, Investigation Finds

WASHINGTON — U.S. trade officials have determined that four major Chinese solar companies attempted to evade tariffs by funneling products into the United States through Southeast Asian countries, according to a copy of the decision viewed by The New York Times.

The decision applies to the Thailand operations of Canadian Solar and Trina Solar, as well as BYD Cambodia and Vina Solar Vietnam. The Department of Commerce is expected to announce the decision Friday morning.

The investigation, which has set off a clash between powerful solar panel importers and a small collection of U.S.-based producers, centered on whether Chinese companies have been trying to bypass tariffs that the United States imposed on cheap solar panels imported from China. In recent years, Chinese solar companies have significantly expanded their manufacturing presence in Southeast Asian countries that do not face the same tariffs.

The trade case rests on whether the Chinese companies are actually using these Southeast Asian countries as a significant site of manufacturing, or if they are just making minor changes to products that are largely made in China to try to get around U.S. trade rules.

Companies that import solar products into the United States have protested the investigation, saying that it is preventing them from importing enough material to meet demand as the United States moves quickly to embrace clean energy solutions.

Other companies that were also under investigation — namely New East Solar Cambodia, QCells Malaysia, Jinko Solar Malaysia and the Vietnam operations of Boviet Solar — were found not to be violating U.S. trade rules.

The results of the investigation are likely to incite criticism from Republicans and domestic industry that the Biden administration is failing to crack down on China for unfair trade behavior. The Biden administration decided in June to halt any tariffs resulting from the case, regardless of the ruling, for a period of two years in order to ensure the United States has a sufficient supply of solar panels to fuel the energy transition and mitigate climate change.

In a statement Friday, the Coalition for a Prosperous America, a group that promotes American manufacturing, called for the Biden administration to withdraw its emergency declaration that had neutralized the result of the investigation, and to enforce U.S. trade laws instead.

Mr. Biden’s declaration “gives Chinese manufacturers a free pass to illegally” bypass U.S. trade laws for 24 months and protects them from retroactive duties, the coalition said.

As part of the decision, the Commerce Department also set up a certification process requiring companies that had been found to be dodging tariffs to provide certain documentation in order to clear the charge.

The decision was previously reported by The Wall Street Journal.

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