Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2

Vista Projects
Copper Tip Energy Services
Copper Tip Energy
Vista Projects

Tariff Fight Paralyzing US Solar Threatens American Steelmakers

These translations are done via Google Translate
For decades, American steelmakers have enjoyed a reliable shield against foreign competitors: US trade policy. Now they say that very protection is under threat from the solar industry.

Solar developers have pushed a novel argument in their quest to scrap a probe into whether Chinese panel makers are evading tariffs. The Biden administration, they say, should consider how the investigation is undermining the fight against climate change.

That reasoning strikes fear into American steel. The country, after all, has long set duties to combat unfair trade based on a narrow set of criteria centered around competition, subsidies and pricing. Any new criteria risk making it harder for US industrials to win new duties in future disputes.

It would tell US manufacturers that “even if you have a valid case and you’re losing jobs” because of unfair competition, you might be denied relief, said Scott Paul, president of the Alliance for American Manufacturing, a group that represents steelmakers and workers. “If you weaken that, you’re going to weaken overall support for more trade.”

As solar-installation advocates pitch a different approach to trade policy, several US senators have made direct appeals to President Joe Biden, encouraging him to factor climate into the inquiry, according to people familiar with the discussions who weren’t authorized to speak publicly.

“You have an administration that said they were going to do a climate test on everything,” said George Hershman, chief executive officer of SOLV Energy, a solar developer pushing to end the probe. “Is that a stretch for appropriateness? Probably not.”

On Monday, Biden attempted a slightly different strategy to resolve the crisis. He invoked the Defense Production Act to support US-made solar and other domestic clean-energy manufacturing and used emergency authorities to impose a two-year freeze on new tariffs for panels. But his moves were quickly rebuked by domestic manufacturers.

“In order to avoid this alleged national emergency, we are going to allow ourselves to become even more dependent on Chinese-owned solar companies in Malaysia, Vietnam, Cambodia, and Thailand,” Tim Brightbill, a trade lawyer at Wiley Rein, said in an email. “This is wrong on multiple levels.”

The trade case—sought by a small California panel manufacturer—is existential for much of US solar. For months, Commerce has been investigating whether Chinese solar manufacturers are circumventing decade-old duties by assembling equipment in Cambodia, Malaysia, Thailand and Vietnam, prompting shipments from those countries to fall. The threat of retroactive tariffs has paralyzed parts of the US solar sector, risking installation jobs and slowing the deployment of panels—a critical piece of Biden’s push to slash emissions from the country’s power grids. (Preliminary findings in the case are expected by late August).

ROO.AI Oil and Gas Field Service Software

The Solar Energy Industries Association is lobbying lawmakers to include language in a domestic manufacturing bill that would force Commerce to determine whether any new duties are in the public interest. Others contend Commerce already has authority under existing law to determine that it’s simply not “appropriate” to expand existing duties, based on climate and economic concerns.

Steel producers and workers, meanwhile, have pressed leaders in Washington to resist the push by the solar developers. Now isn’t the time to radically change trade laws and how they work, they’ve said.

The trade case has caused friction between solar and steel, two industries that frequently collaborate on clean-power projects. “We’re still trying to figure out what the long-range plan of this is,” Leon Topalian, the chief executive officer of steel giant Nucor Corp., said in an interview. “We’re going to be a big supplier in the renewable space.”

Inside The NLMK Indiana Steel Facility As Shares Advance Most This Year
An employee monitors a machine moving a steel slab at a mill in Portage, Indiana. Photographer: Daniel Acker/Bloomberg

At issue are so-called antidumping and countervailing duties, which are intended to level the playing field for domestic manufacturers against imported goods that are subsidized or sold below the cost to produce them. Federal laws and regulations governing this type of duties dates back more than a century.

Antidumping and countervailing duties are distinct from other, more subjective tariffs under US law—including those former President Donald Trump wielded on steel and aluminum in the name of national security. (Biden has already chipped away at steel’s robust trade protections introduced by his predecessor).

“If you stick to the antidumping and subsidy script, there’s a clear set of rules,” said William Reinsch, a trade expert at the Center for Strategic and International Studies. “You have to prove a specific bad thing has happened—either dumping or subsidization—and you have to prove you have been injured because of that, and not some other reason. And only if you prove those two things do you win.”

Adding climate considerations or other public-interest tests would create a slippery slope, he said. Even the Trump administration, known for digging up little-known laws to launch its trade policy, left Commerce’s antidumping and countervailing duty laws largely untouched.

If other elements such as climate impact are also taken into account, “it opens the door to a thousand other requests,” Reinsch said. “There will inevitably be no shortage of other people arguing that their cause is also important.”

Share This:

More News Articles