U.S. Solar Companies Warn Of Devastating Impact From New Chinese Tariffs

On Friday, the House passed a bipartisan bill to restore tariffs on Chinese solar panels sold out of Southeast Asia, which President Joe Biden suspended last year to "satisfy the demand for reliable and clean energy." The legislation has already garnered support among some Senate Democrats, indicating a significant possibility that the bill will become law.

The green energy industry relies heavily on cheap Chinese suppliers, and China controls more than 80 percent of the world's solar panel production. Despite Biden's efforts to spend hundreds of billions of dollars on green energy subsidies to allow the United States to "compete with China,"

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U.S. solar companies have been flooded with increased demand and have turned to China to satisfy it. A reimposition of Chinese solar tariffs would cost U.S. developers at least $1 billion in retroactive fees, prompting solar executives and trade groups to publicly stress their need to maintain a free flow of cheap Chinese goods.

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The Solar Energy Industries Association and the American Council on Renewable Energy stated that Chinese tariffs "would have a devastating impact on U.S. solar deployment." Solar energy contractor George Hershman has said that tariffs would prompt him to lay off "thousands of people," given the hundreds of millions of dollars in projects that his company, SOLV Energy, has fulfilled using Chinese goods.

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However, many congressional Democrats and Republicans support renewed tariffs, arguing that China has provided illegal subsidies to its solar energy companies, allowing them to undercut U.S. competitors. When the United States imposed tariffs on Chinese solar companies to combat those unfair practices,

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China got around the tariffs by shipping its products through a handful of nations in Southeast Asia, including Cambodia, Malaysia, and Vietnam. Tariffs on Chinese goods sold out of those countries would allow U.S. solar manufacturers to compete with "cheap, unfairly subsidized imports," an argument that both Missouri Republican congressman Jason Smith and Ohio Democratic senator Sherrod Brown have made in recent days.

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For the Biden administration, the desire to transition to green energy has outweighed any appetite to combat China. Last summer, as Biden's Commerce Department investigated whether Chinese solar companies dodged U.S. tariffs by routing their operations through Southeast Asia, Biden issued an executive order delaying tariffs on Chinese solar products sold in the region for two years.

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Biden held firm on that delay even as his Commerce Department determined months later that China's solar industry indeed did dodge U.S. tariffs through its work in Southeast Asia. Ensuring a steady supply of solar panels, the White House said in a June 2022 fact sheet, was simply too important to risk.

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The Biden administration, which did not return a request for comment, hasn't changed its assessment as the solar tariff bill works through Congress. Biden said last week he would veto the bill, which the White House said would "create deep uncertainty for jobs and investments in the solar supply chain."

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Still, should the tariffs receive staunch bipartisan support, they could still become law if Congress includes them in a bill that Biden does support, a possibility about which a House Democratic aide warned in an April interview with the Post.

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This is not the first time influential Biden administration officials have lobbied to favor China's solar industry. Top Energy Department official Jigar Shah 2011 partnered with three Chinese solar giants to form the Coalition for Affordable Energy.

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This nonprofit aggressively campaigned to kill U.S. tariffs on Chinese solar panels. Shah argued that American consumers could not afford solar panels without cheap Chinese goods, stressing the need for the two nations to "work together to solve our planet's energy and environmental crisis." Shah also accused the tariffs' proponents of mounting a baseless "anti-China crusade."

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Ten years later, in 2021, Biden tapped Shah to run the Energy Department's Loan Programs Office, flooding the China-dominated green energy sector with billions of taxpayer dollars. While the office was largely dormant under Trump, Biden's so-called Inflation Reduction Act gave it hundreds of billions of dollars, meaning Shah now has nearly $400 billion at his disposal.