Biden to waive tariffs for 24 mths on solar panels hit by probe -sources

Clean Energy Technologies

06/06/2022 04:54

(Releads with timing, adds details)
    By Jeff Mason
    WASHINGTON, June 5 (Reuters) - President Joe Biden will
declare a 24-month tariff exemption on Monday for solar panels
from four Southeast Asian nations after an investigation froze
imports and stalled projects in the United States, sources
familiar with the matter told Reuters.
    The move comes amid concern about the impact of the Commerce
Department's months-long investigation into whether imports of
solar panels from Cambodia, Malaysia, Thailand and Vietnam are
circumventing tariffs on goods made in China.
    Biden's action would allay companies' concerns about having
to hold billions of dollars in reserves to pay potential
tariffs, one source familiar with the White House's plans said. 
    "There is  going to be this safe harbor timeout on the ...
collection of duties, and that's at the heart of what's going to
save all of these solar projects and ensure that they are going
forward," the source said.
    Biden also will invoke the Defense Production Act to drive
U.S. manufacturing of solar panels and other clean energy
technologies in the future, with the support of loans and
grants, the sources said.
    State governors, lawmakers, industry officials and
environmentalists have expressed concern over the investigation,
which could have led to retroactive tariffs of up to 250
percent.
    The issue created a unique dilemma for the White House,
which is eager to show U.S. leadership on climate change, in
part by encouraging use of renewable energy, while respecting
and keeping its distance from the investigation proceedings.
    Using executive action and invoking the DPA, which gives
presidents some authority over domestic industries, allows Biden
to take advantage of the tools available to him without stepping
on the Commerce Department inquiry.
    A second source said Biden's proclamation, relying on
authority from a 1930 trade law, would apply only to the four
countries and run in parallel with the investigation.
    Depending on its outcome, tariffs could be levied on panels
imported after the 24-month period, but the threat of
retroactive payments would be off the table, the source added.
    "If you bring the stuff in during that 24-month period,
regardless of the outcome of the investigation, there will not
be those additional duties," the second source said.
    The investigation essentially halted the flow of solar
panels that make up more than half of U.S. supplies and 80
percent of imports.
    It had a chilling effect on the industry, according to clean
energy groups, some of which asked Commerce Secretary Gina
Raimondo to dismiss it. Raimondo has said she had no discretion
to influence it.
    "The president’s action is a much-needed reprieve from this
industry-crushing probe," Abigail Ross Hopper, president of the
Solar Energy Industries Association, said in a statement.
    "During the two-year tariff suspension window, the U.S.
solar industry can return to rapid deployment while the Defense
Production Act helps grow American solar manufacturing."
    Announced at the end of March, the investigation could take
150 days or more to complete.
    Biden has previously invoked the DPA to tackle a shortage of
infant formula in the United States, ramp up domestic output of
key minerals for electric vehicle batteries, and fight the
COVID-19 pandemic through tests and vaccine production.
    "It is a tool to do what we obviously desperately need to
do, which is rapidly grow the domestic manufacturing capacity"
of solar panels," the second source familiar with the matter
said.
    The administration was "very focused on making sure there's
reliable and resilient supply chains at this critical moment for
our energy sector, for our ability to support our consumers and
to tackle the climate crisis," he added.
    Ramping up renewable energy such as solar is crucial to
Biden's goal of cutting U.S. greenhouse gas emissions by 50% to
52% by 2030, versus 2005 levels, as well as decarbonizing the
U.S. power grid by 2035.
    The Commerce Department inquiry has prompted 19 state
governors, 22 U.S. senators, and dozens of members of the House
of Representatives to express concern in letters to Biden.
    "Initiation of this investigation is already causing massive
disruption in the solar industry, and it will severely harm
American solar businesses and workers and increase costs for
American families as long as it continues," said one letter
signed by senators including Martin Heinrich, a Democrat from
New Mexico, and Thom Tillis, a Republican from North Carolina. 

 (Reporting by Jeff Mason; Additional reporting by Nichola
Groom; Editing by Clarence Fernandez)
 ((jeff.mason@thomsonreuters.com; +1 202 898 8300; On Twitter:
@jeffmason1; Reuters Messaging:
jeff.mason.thomsonreuters.com@thomsonreuters.net))