- A group of US solar panel makers asked the Commerce Department to consider retroactively imposing duties on Vietnam and Thailand.
- The new tariffs could harm Vietnam, which risks the highest duties as the United States considers it a non-market economy.
A group of US solar panel makers asked the Commerce Department to consider retroactively imposing duties on Vietnam and Thailand due to a surge in imports. Those countries are being probed for alleged unfair practices in the multi-billion-dollar trade.
In May, the Commerce Department started investigating silicon solar cells and panels made in Vietnam, Thailand, Malaysia, and Cambodia. A group of domestic manufacturers alleges the products were sold in the US at excessively low prices and benefited from subsidies from China, home to many manufacturers with factories in the region.
US President Joe Biden has pledged to revitalise American manufacturing by providing incentives for domestic production of goods to help fight climate change, including solar panels and electric-vehicle batteries mainly made in China. Some in the small US solar-manufacturing sector say the industry struggles to compete with low-priced imports.
As speculation about the trade probes began circulating this year, exports from Vietnam and Thailand surged, the American Alliance for Solar Manufacturing Trade Committee said in a complaint filed with Commerce, which followed its earlier petition in April to start the trade investigations. The group represents domestic producers, including Hanwha Qcells and First Solar.
That investigation could lead to high tariffs from early July if US federal officials confirm unfair trading practices in preliminary determinations scheduled in early October and uphold retroactive duties applicable 90 days before their decisions.
The new tariffs could harm Vietnam, which risks the highest duties as the United States considers it a non-market economy. Trade experts say that status usually leads to harsher sanctions because domestic pricing is not considered reliable.
The US estimated Vietnam’s gap between domestic and export prices, known as dumping margins, to be over 270 per cent, using Indonesia as a benchmark, which is more than three times higher than Thailand’s. Larger margins are likely to result in higher tariffs if approved, experts said.
In their latest complaint, the US manufacturers said the volume of solar imports from Vietnam and Thailand rose 39 per cent and 17 per cent in the second quarter compared with the first quarter, as the two countries allegedly increased shipments to the United States ahead of potential duties.
Such moves could be considered “critical circumstances,” US producers said. The Commerce Department and the International Trade Commission must find that critical circumstances exist for duties to be imposed retroactively.
US trade data shows that in April, imports rose to a record high of more than $680 million—over half the total for that month—and remained far above monthly averages in May and June. At the same time, exports in dollar terms from Thailand, Malaysia, and Cambodia have slowed.
In the first six months of the year, Vietnam supplied the US with solar panels and modules worth $3.3 billion, equal to 45 per cent of all US imports, up from less than 30 per cent last year when full-year Vietnamese exports to the US amounted to $4 billion.