Commerce secretary defends China solar tariff probe despite freeze on clean energy projects

Commerce secretary defends China solar tariff probe despite freeze on clean energy projects

Department of Commerce Secretary Gina Raimondo pushed back Wednesday against bipartisan criticism that the agency has cast a shadow over the solar industry.

The Biden Cabinet official defended an investigation into whether China is flouting U.S. tariffs by secretly providing solar panel components to manufacturers in Southeast Asia, a probe that has forced the solar industry to hit the pause button and go into panic mode.

Ms. Raimondo said her hands are essentially tied because the department is “obliged” to investigate an allegation by a small California solar panel manufacturer that China is using four nearby countries — Malaysia, Thailand, Cambodia and Vietnam — to funnel parts into the U.S. that would otherwise be subject to trade tax.

Roughly 80% of imported solar panels come from those four countries, according to the American Clean Power Association. More than 300 solar projects have already screeched to a halt, putting potentially tens of thousands of clean energy jobs on the line, according to a survey of businesses by the Solar Energy Industries Association.

“We have to move forward quickly to meet our climate goals, but as I also said … there’s a process, there’s a law,” Ms. Raimondo told members of the Senate Commerce Committee. “I have to implement the law.”

Commerce has until late August to issue a preliminary decision on whether China is circumventing a U.S. import tax, a timeline that Ms. Raimondo said the department will try to expedite. But she expressed hesitancy to interfere as a political appointee in a probe run by civil servant regulators.

 Sen. Brian Schatz, Hawaii Democrat, was unsatisfied and pressed for more urgency.

 “You do have the discretion to get a little more personally engaged, it doesn’t jeopardize the independence of the investigation, informing Congress as to the status of it also is not in any way improper,” he said. “We are in a major, major hurry because the solar industry in the United States is at a halt.”

Ms. Raimondo agreed with a suggestion from Sen. Jerry Moran, Kansas Republican, that Congress and Commerce should join forces to devise stricter criteria needed to launch such investigations to prevent the future handicapping of entire industries.

Commerce could implement 200% tariffs if wrongdoing is found, the U.S. solar industry has warned. However, Ms. Raimondo called that outcome “exceedingly unlikely” because it’s “not fitting with the precedent that we’ve had.” She tried to ease qualms by saying somewhere in the 10-12% range would likely be more appropriate.

Lawmakers and the industry have questioned the accuracy of Auxin Solar’s February petition that China was cheating on U.S. tariffs, which triggered the probe.  

Mr. Moran doubted how a “small, single company without access to confidential information actually provided necessary data to meet the statutory requirements to initiate the inquiry” that has been “pretty darn damaging to businesses in the United States.”

Ms. Raimondo said the company’s complaint met Commerce’s criteria and thus forced them to move forward.

There’s no clear timeline on when Commerce will issue its ruling. Ms. Raimondo acknowledged the difficulties facing the industry and would only go so far as to say “if we can do better than August, we certainly will.”