US Solar Manufacturers File Case Against China’s Alleged Illegal Trade Practices In SE Asia

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American Alliance for Solar Manufacturing Trade Committee of US solar manufacturers represented by DC law firm Wiley Rein LLP, filed a set of antidumping and countervailing duty petitions with the US International Trade Commission (USITC) and the US Department of commerce. The companies subject to this investigation would be primarily Chinese-headquartered companies. The move comes at a time when much like Europe, inventory levels of panels in the US has peaked to what many consider over a year’s supply, severely threatening future demand.   

This petition was presented to investigate potentially illegal trade practices by Cambodia, Malaysia, Thailand, and Vietnam that are injuring the US solar industry. The committee is made up of leading US solar manufacturers from across the country such as Convalt Energy, First Solar, Meyer Burger, Mission Solar, Qcells, REC Silicon, and Swift Solar filled out the petition.

This action came less than a year after the US Department of commerce determined Chinese solar manufacturers malpractices of circumventing tariffs on solar cells and solar panels by shipping their products through Cambodia, Malaysia, Thailand, and Vietnam. Afterward, the administration imposed a two-year moratorium on these tariffs, giving the Chinese-owned solar manufacturers in these countries time to shift their supply chains. Companies found to be circumventing the tariffs are not expected to pay tariffs when the moratorium ends in June 2024, because their Southeast Asia-based supply chains mean they are no longer in technical violation as outlined in the circumvention decision. This new trade case is required to address the unfair trade practices by these solar manufacturers in Cambodia, Malaysia, Thailand, and Vietnam.

The International Energy Agency (IEA) reports that there is a year and a half of stockpiled panels in American warehouses. Imports into the US exceeded installations in 2023 by more than 25 gigawatts, and prices have fallen by more than 50 percent in that time. This anti-competitive, market-distorting behavior undermines the level playing field necessary for US solar manufacturers to compete on their own merits. It also underlines the limited impact even immediate action can have for the near future, as these inventories are drawn down first, depressing demand from domestic US manufacturers. 

The cases come on the heels of US Treasury Secretary Janet Yellen’s recent remarks that “China’s overcapacity distorts global prices and production patterns and hurts American firms and workers.” Chinese-owned companies’ global market share in solar products is more than 80 percent. 

The antidumping and countervailing duties are intended to offset the amount by which a product is sold at less than fair value, or “dumped,” in the United States. The margin of dumping is calculated by the Commerce Department. Countervailing duties are intended to offset unfair subsidies that are provided by foreign governments and benefit the production of a particular good. After affirmative preliminary determinations by the Commerce Department, estimated duties in the amount of the dumping and subsidies will be collected from importers at the time of importation. The USITC, an independent agency, will determine whether the domestic industry is materially injured or threatened with material injury because of the unfairly traded imports.

As the next step, the commerce department will determine whether to initiate the investigations within 20 days of today’s filing, and the USITC will reach a preliminary determination of material injury or threat of material injury within 45 days. The entire investigative process will take approximately one year, with final determinations of dumping, subsidization, and injury likely occurring spring 2025. The collection of preliminary countervailing and antidumping duties will begin approximately four months and six months, respectively, after initiation.