Exclusive: Biden to waive tariffs for 24 months on solar panels hit by probe

U.S. President Joe Biden walks across the South Lawn after disembarking from Marine One as he returns from Rehoboth Beach, Delaware, with the First Lady at the White House in Washington, U.S., June 5, 2022. REUTERS/Elizabeth Frantz

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WASHINGTON, June 5 (Reuters) – President Joe Biden will on Monday declare a 24-month tariff exemption for solar panels from four Southeast Asian countries after an investigation froze imports and blocked projects in the United States. United, sources familiar with the matter told Reuters.

The move comes amid concerns about the impact of the Commerce Department’s months-long investigation into whether solar panel imports from Cambodia, Malaysia, Thailand and Vietnam are circumventing duties. customs on products made in China.

Biden’s action would ease corporate concerns about needing to hold billions of dollars in reserves to pay potential tariffs, a source familiar with the White House plans said.

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“There’s going to be this timeout on the… collection of fees, and that’s at the heart of what’s going to save all of these solar projects and ensure they go ahead,” the source said.

Biden will also invoke the Defense Production Act to boost U.S. manufacturing of solar panels and other clean energy technologies in the future, with the support of loans and grants, the sources said.

State governors, lawmakers, industry officials and environmentalists have expressed concern over the investigation, which could have led to retroactive tariffs of up to 250%.

The issue has created a unique dilemma for the White House, which is keen to show American leadership on climate change, in part by encouraging the use of renewable energy, while respecting and keeping its distance from investigative procedures. .

Using executive action and invoking the DPA, which gives presidents some authority over national industries, allows Biden to take advantage of the tools at his disposal without intervening in the Commerce Department’s investigation.

A second source said Biden’s proclamation, relying on the authority of a 1930 trade law, would only apply to the four countries and would run parallel to the investigation.

Depending on its outcome, customs duties could be levied on panels imported after the 24-month period, but the threat of retroactive payments would be removed, the source added.

“If you bring things in during that 24-month period, regardless of the outcome of the investigation, there will be no such additional rights,” the second source said.

The investigation essentially halted the flow of solar panels which account for more than half of US supplies and 80% of imports.

It has had a chilling effect on the industry, according to clean energy groups, some of which have called on Commerce Secretary Gina Raimondo to reject it. Raimondo said she had no discretion to influence him.

“The president’s action is a much-needed reprieve from this industry-destroying probe,” Abigail Ross Hopper, president of the Solar Energy Industries Association, said in a statement.

“During the two-year tariff suspension window, the U.S. solar industry can resume rapid deployment while the Defense Production Act helps expand U.S. solar manufacturing.”

Announced at the end of March, the investigation could take 150 days or more.

Biden has previously invoked the DPA to address an infant formula shortage in the United States, increase domestic production of key minerals for electric vehicle batteries, and combat the COVID-19 pandemic through testing and production. of vaccines.

“It’s a tool to do what we desperately need to do, which is to rapidly increase domestic ‘solar panel’ manufacturing capacity,” the second source familiar with the matter said.

The administration was “very focused on ensuring reliable and resilient supply chains at this critical time for our energy sector, for our ability to support our consumers and address the climate crisis,” he said. -he adds.

Increasing renewable energy such as solar power is crucial to Biden’s goal of reducing U.S. greenhouse gas emissions by 50% to 52% by 2030, compared to levels of 2005, as well as decarbonizing the US electrical grid by 2035.

The Commerce Department investigation prompted 19 state governors, 22 U.S. senators and dozens of members of the House of Representatives to express concern in letters to Biden.

“The initiation of this investigation is already causing massive disruption to the solar industry, and it will seriously harm American solar companies and workers and increase costs for American families as long as it continues,” a signed letter said. by senators, including Martin Heinrich, a Democrat. from New Mexico and Thom Tillis, a Republican from North Carolina.

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Reporting by Jeff Mason; Additional reporting by Nichola Groom; Editing by Clarence Fernandez

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