US Tariffs on Asian Solar Gear Hit 3,521% After Panel Vote

A worker handles photovoltaic cells at Irex Energy JSC's manufacturing facility in Vung Tau, Vietnam, on Monday, July 15, 2019. After U.S. President Donald Trump slapped higher tariffs on China, production in neighboring Vietnam went into overdrive. Chinese manufacturers, who face a 55% U.S. tariff on their goods, relocated some production to Vietnam, while local businesses saw a jump in orders. In June alone, U.S. imports of solar cells from Vietnam surged 656% from a year ago. Photo by Yen Duong /Bloomberg

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(Bloomberg) — US duties on solar equipment from four Southeast Asian countries are now set to take effect, following a government trade commission’s conclusion Tuesday the imports threaten domestic manufacturers. 

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With a vote Tuesday, the International Trade Commission concluded imported solar cells and modules from Cambodia, Malaysia, Thailand and Vietnam were injuring domestic manufacturers. The determination was a key final threshold for duties to take full effect, setting the stage for collections in June. 

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The decision is a victory for manufacturers operating in the US. Companies including Hanwha Q Cells and First Solar Inc. have blamed a surge of discounted imports from Southeast Asia for making it difficult to build and sell equipment domestically, even with tax incentives meant to help drive domestic manufacturing of advanced energy technology. First Solar gained as much as 4.8% Tuesday. 

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The duties — meant to counter unfair pricing and subsidization of the equipment — will raise the cost of solar equipment from Southeast Asia, a drag on renewable developers in the US. Solar is now a leading source of US power-capacity installations, but the duties add to other policy and supply headwinds complicating the potential for future growth. Congressional Republicans have moved to scale back key federal support, and the industry faces the prospect of further tariffs against imported solar.

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The duties, effectively calculated last month by the Commerce Department, are set to reach as high as 3,521% for some manufacturers in Cambodia, reflecting the country’s decision to stop participating in the US investigation . However, rates for other countries and companies were far lower. The average duty was 396% for Vietnam, 375% for Thailand and 34% for Malaysia. 

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The US Commerce Department set the duties in April after a yearlong probe that found some solar manufacturers in the four countries were unfairly benefiting from government subsidies and selling exports to the US at rates lower than the cost of production.

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But imposition of the duties hinged on Tuesday’s action by the US International Trade Commission, which was ordered to determine whether domestic producers were being harmed or threatened by the imports. 

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The US imported $12.9 billion in solar equipment last year from the four nations, accounting for nearly 80% of total shipments, according to BloombergNEF. JinkoSolar was assessed duties of about 245% for exports from Vietnam and 40% for exports from Malaysia. Trina Solar in Thailand faces levies of 375% and more than 200% from Vietnam. JA Solar modules from Vietnam could be assessed at about 120%.

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(Updates with share price in third paragraph.)

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