Four Southeast Asia countries face US solar tariff threat

Vietnam, Cambodia, Malaysia, and Thailand are likely to pay tariffs of up to 254% on their export of solar panels and modules to the U.S. after the Senate has passed a resolution to restore import tariffs for the four countries.

The U.S. Senate approved earlier this month a Congressional Review Act (CRA) resolution to rescind President Joe Biden’s two-year “pause of antidumping and countervailing duties on solar products” from the four countries, said the American Action Forum (AAF).

“Congress and the administration agree on the necessity of trade enforcement but disagree on these tariffs specifically. Many in Congress view imposing tariffs on solar products from these countries as essential to enforcing trade rules and addressing Chinese trade abuses,” the Washington-based AAF said in a report.

“Other members view implementing these tariffs as an additional tool to target China’s solar industry, which has been found to use forced labor. The administration ostensibly views solar product imports as essential to advance its climate objectives.”

However, Biden is promising to veto the Senate measure to keep those solar panels tariff-free till June 2024, as the White House has said he will do this to help the U.S. build out its solar capacity.

The AAF report said, “President Biden is expected to prioritize his climate agenda in this case by vetoing the CRA resolution to shield these solar products from the tariffs until 2024; the episode demonstrates the tension between Congress and the administration on trade policy, especially regarding trade enforcement on products from China that are considered essential by the administration for its climate agenda.”

Last year, the Biden administration put a temporary freeze on solar panel tariffs to the four Southeast Asian countries with the intent to accelerate their clean energy agenda by making those products cheaper. The U.S. President delayed the application of antidumping and countervailing duties on solar product imports from the countries for two years.

The delay was supported by solar panel importers and project installers, who argued that the tariffs should be paused for even longer.

In December, a U.S. trade court ruled that four Chinese companies had illegally tried to dodge American tariffs on solar products sent from China by routing their products through factories in Southeast Asia. The decision applied to the Thailand operations of Canadian Solar and Trina Solar, as well as BYD Cambodia and Vina Solar Vietnam, according to the U.S. Department of Commerce.

Vietnam has attracted global producers of solar modules and panels, with major American, Canadian, and Chinese investors already present, as the tropical country is ramping up investment in solar and wind power.

JinkoSolar, one of the world’s top makers of solar modules, has 12 production facilities globally, including two in Vietnam. Both are in Song Khoai Industrial Park, developed by Thailand’s Amata Corp., in the northern province of Quang Ninh.