Secretary of Commerce may have underrepresented history of solar tariff rates before Senate

Appearing before a subcommittee meeting with the Senate, Secretary of Commerce Gina Raimondo addressed bipartisan concerns about an antidumping investigation launched by a petition from a small module manufacturer, Auxin Solar. The investigation could lead to tariffs on solar goods shipped from four Southeast Asian countries that supply about 80% of US polysilicon-based solar panels.

The tariffs can reach as high as 250% of the value of the shipped goods, backdated to November 2021, which has caused a level of uncertainty, essentially halting the deployment of solar in the United States.

“It is true Commerce would be permitted to impose a tariff at that excessive level,” said Secretary Gina Raimondo. “That is exceedingly unlikely, which is to say that level of a tariff is only reserved in outside cases when you can’t tell the difference between the company and, say, the Communist Party of China. The last 150 times we’ve done this since 2012, we’ve come out in the 10, 11, 12 percent range.”

“I am in no way predetermining what this will be, if it will be anything, but the 200% is an extreme case and not fitting with the precedent that we’ve had,” said Raimondo. pv magazine will follow up with Commerce to determine if the Secretary was referring to the past 150 antidumping cases in general, or if this figure was referring specifically to the solar industry.

However, records in the Federal Register show that tariff rates have often come in much higher than 10% to 12%. Dating back to 2012, solar tariffs on Chinese antidumping have ranged from less than 1% to over 100%. In 2017-2018, major suppliers Trina Solar were 92.5%, Risen Energy 100.79%, Canadian Solar 95.5%, Jinko Solar 95.5%. Suppliers that were fully in compliance with the seventh antidumping case paid 0% in tariffs.

And, for unlisted companies that did not participate directly in the investigation, tariffs have been 238.95% each year since 2012.

The investigation has led the Solar Energy Industries Association (SEIA) to cut its forecast for solar deployments this year by 46%, and House Representative Scott Peters said that as many as 100,000 US jobs are on the line as a result.

Reacting to the meeting, SEIA president Abigail Ross Hopper said, “Secretary Raimondo seems to suggest that if anti-circumvention tariffs were imposed on solar imports, the applicable tariff rates would be relatively minor and thus a low risk for importers. These remarks play into the petitioner’s misleading claims about the merits of the petition and impacts of the investigation.”

During the meeting, Raimondo was pressed by Senators on both sides of the aisle on the urgency of the issue. “We are in a major, major hurry, because the solar industry in the United States is at a halt,” said Senator Brian Schatz (D-HI).

To succeed in this case, Auxin Solar must show that solar cell manufacturing is “minor and insignificant processing,” Hopper called this “an absurd claim for anyone with a basic understanding of solar cell manufacturing.”

Schatz argued the allegation that the manufacturing taking place in the four Southeast Asian countries is “minor and insignificant” is “facially not true.” He added that Commerce has already determined in multiple rulings that the wafer to cell conversion taking place in the four countries is a significant service, suggesting that anti-circumvention allegations are invalid.

“I’ve heard from many of you, and many in the industry, and I share the sense of urgency,” said the Secretary. However, Raimondo distanced herself from the initial fact-finding process spurred by the petition, saying she was “not involved” and that she was unable to speak in detail about the process.

Sen. Schatz added that the authority is vested in the Secretary to administrate the process. He pleaded with the Secretary to get more personally involved. Schatz also asked Raimondo to commit to meeting with the Senate on a weekly basis to update the process “with pace,” which Raimondo agreed to.

Statutory requirement

Senator Jerry Moran (R-KS) asked how the investigation can be swiftly ended. “When I’ve asked you this question, you’ve said your hands are tied,” he said, “and I’m trying to figure out how to untie your hands.”

“Statutorily, there is no discretion,” said Raimondo. “We are going to move as fast as we can.”

Moran questioned the Auxin petition, asking how a “small, single company without access to confidential information” could satisfy requirements to launch the investigation. “Why is there no industry-supported threshold to initiate this anti-circumvention inquiry? Would legislation be helpful?”

Raimondo then suggested to the Senator that if legislation were enacted to give Commerce more discretion, then it could implement those changes. Moran requested that Commerce and the Senate work together to find ways to rework the statue that mandated the investigation.

Industry remarks

“If you buy a solar panel today from one of the four affected countries, you may not know how much you owe in tariffs until months, or even years, from now,” said Hopper. “Why would any reasonable business buy solar panels in such a risky and uncertain business environment?”

“Solar cell manufacturing occurs in many stages and will continue to be a global operation until the United States makes serious investments in domestic manufacturing,” said Hopper. The call for long-term industrial manufacturing policy has been echoed by many players in the solar industry.

The committee meeting can be viewed in full here.

This article was updated to reflect that more clarity is needed on the Secretary’s statement about previous tariff rates, and specific examples of past rates replaced the reported median number.