Recently, the Vietnam Trade Remedies Administration has received warning information that solar cells exported from Vietnam to the United States may be subject to anti-circumvention duty of up to 254%.
In February 2022, US solar panel manufacturer Auxin Solar Inc. petitioned the U.S. Department of Commerce to investigate solar panel product manufacturers in Malaysia, Vietnam, Thailand, and Cambodia, alleging that Chinese manufacturers are channeling manufacturers in the South East Asia region to evade trade remedy dutyes, transport their products to Southeast Asian countries and then export to the US market.
On December 8, 2022, the US Department of Commerce announced a preliminary determination on the issue of some solar cell manufacturers in Malaysia, Vietnam, Thailand and Cambodia using input materials from China is evading US anti-dumping and anti-subsidy duties related to solar battery products originating from China.
During the U.S. Department of Commerce's review of the Auxin petitions, the Biden administration in June 2022 invoked the Defense Production Act to take a number of actions to "accelerate the production of producing clean energy technologies in the country."
As part of this policy, Mr. Biden announced a two-year duty-free period for solar products imported from Malaysia, Vietnam, Thailand and Cambodia (Southeast Asia). This means that even if the U.S. Department of Commerce concludes that these countries are evading trade defense duties on solar panels, products imported from the above Southeast Asian countries will remain exempt from the applicable anti-dumping and countervailing duties until at least June 5, 2024.
Possibility to remove the Southeast Asia solar panel duty exemption
It is known that information about the risk of removing the Southeast Asia solar panel duty exemption order came from the US Senate's vote to restore duties on solar panels from Southeast Asia to as much as 254% as of May 3, 2023.
On April 28, 2023, in the House of Representatives, delegates voted with a vote of 221-202 in favor of restoring duties on solar panels imported from Vietnam and 3 Southeast Asian countries.
Next, with a vote of 56 to 41 of the US Senate in favor of restoring duties on solar cells imported from Vietnam and 3 Southeast Asian countries on May 3, 2023, it is likely that the anti-dumping and anti-subsidy duty rates applied to China will be transferred to the above four countries, possibly in the form of anti-circumvention duties of trade remedies.
However, the final decision will still be up to President Joe Biden, who has stepped up his green energy campaign in the United States, having previously issued an order to eliminate duties until June 2024.
From a political perspective, the fact that the US Senate and House of Representatives unanimously voted in favor of the removal of duties is in consideration of the US dependence on raw materials originating from China. Thereby, not only the goal of achieving green energy, but the decisions on duty exemption and imposition of trade remedies duty on investigated products can also come from other motives and causes.
Responding to political pressure from bipartisanship, President Biden issued a statement vowing to uphold the decision to temporarily exempt the ultimate green energy goal, temporarily ignoring the risk of political instability between the United States and China if the resolution to remove the duty exemption order is brought to his table.
Thereby, businesses in Vietnam and Southeast Asia producing solar cells for export to the US can temporarily rest assured, at least until June 2024, because Mr. Joe Biden also said that he did not have intends to extend the duty exemption or suspension beyond this deadline, in order to ensure other U.S. objectives.
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