President Joe Biden on Tuesday vetoed a congressional resolution that would have reinstated tariffs on solar panel imports from Southeast Asia, settling for now a long-running dispute over whether to punish China for trade violations that bypass U.S. rules limiting imports of cheap solar panels from Asia.
The result of Biden’s veto is that a two-year delay on tariffs will continue until at least June 2024.
Lawmakers from both parties have expressed concerns about what they call unfair competition from China, which has long dominated the global market for manufacturing solar panels. Some U.S. manufacturers contend that China has essentially moved operations to four Southeast Asian countries — Thailand, Vietnam, Malaysia and Cambodia — to skirt U.S. anti-dumping rules.
A Commerce Department inquiry last year found likely trade violations involving Chinese products and recommended steep penalties. Biden halted tariffs for two years before the Commerce investigation was completed, saying his action was needed satisfy demand for renewable energy while providing “certainty" for the solar supply chain and solar installation market.
The mere threat of up to $1 billion in retroactive tariffs and higher fees led to delays or cancellations of hundreds of solar projects across the U.S. last year. Solar installations are a key part of Biden’s agenda to fight climate change and achieve 100% clean electricity by 2035.
“America is now on track to increase domestic solar panel manufacturing capacity eight-fold by the end of my first term,'' Biden said in his veto statement Tuesday. “But that production will not come online overnight.''
FILE - Workers walk near solar panels that provide partial electrical power to Istiqlal Mosque as the city skyline is seen in the background, in Jakarta, Indonesia, Wednesday, March 29, 2023.
A two-year pause on tariffs will provide a temporary “bridge” to ensure that when new U.S. factories are operational, “we have a thriving solar installation industry ready to deploy American-made solar products to homes, businesses and communities across the nation,'' Biden said.
Biden said he intends to allow the tariffs to take effect when the current suspension expires in June 2024.
The U.S. industry applauded Biden's action, calling solar panel imports crucial as solar installations ramp up to meet increased demand for renewable energy. Less than 30% of solar panels and cells installed in the U.S. are produced here, although that number is increasing as U.S. manufacturers take advantage of tax credits included in the landmark climate law adopted last year.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said the congressional resolution threatened up to 30,000 American jobs while weakening U.S. energy security.
“The solar and storage industry must build more manufacturing capacity in America, and the two-year tariff moratorium provides a bridge for us to do just that,'' Hopper said. “Curbing supply at this critical time (would) hurt American businesses and prevent us from deploying clean, reliable energy in the near-term.''
The measure on solar tariffs is among several legislative efforts being pushed by newly empowered Republicans to rebuke the Democratic president and block some of his administration’s initiatives, including a rule on clean water and a measure that allows federal retirement plan managers to consider climate change in investment plans. Biden vetoed both legislative measures aimed at undoing his administration's actions.
Nine Democratic senators supported the reinstatement of solar tariffs, along with 12 Democrats in the House. Only one Republican senator and eight GOP House members voted against the tariff plan.
Rep. Jason Smith, R-Missouri, said restoring U.S. tariffs on the four Southeast Asian nations would hold China accountable while protecting U.S. jobs and workers. American manufacturers are facing unfair competition from China, which is subsidizing its panels and selling them at low prices, Smith and other lawmakers said.
"It’s disgusting that Biden’s actions would shield Chinese solar companies — many of which are using child and slave labor — and allow them to circumvent U.S. trade laws," said Sen. Rick Scott, R-Florida.
Nevada Sen. Jacky Rosen, a Democrat whose state has the nation’s most solar jobs per capita, said reinstating the tariffs would have been disastrous for the U.S. industry. Retroactive tariffs would eliminate thousands of jobs “and kill any chance we have to meet our climate goals," she said.