US President Joe Biden will double the tariff rate on solar cells under Section 301 from 25% to 50% in 2024 after the United States Trade Representative (USTR) Katherine Tai submitted a 4-year review report of the tariffs. Nonetheless, the report also proposes 19 temporary exclusions for certain solar manufacturing equipment to support investment in US solar manufacturing.
Exclusions have been proposed for production equipment including cell interconnection machines, screen printing lines, diamond wire saws, and silicon growth furnaces, among others. The complete list of these 19 proposed exclusions for solar manufacturing equipment forms Appendix L of the review report.
The administration said this tariff hike for solar cells is part of its tariff increase on $18 billion of imports from China to protect American workers and businesses.
Along with solar cells, tariffs have been increased across strategic sectors such as steel and aluminum, semiconductors, electric vehicles (EV), batteries, critical minerals, ship-to-shore cranes, and medical products.
The Section 301 tariffs were launched in 2018 by Biden's predecessor Donald Trump, who is vying for another term in the upcoming Presidential election due on November 5, 2024. Earlier this year, in January 2024, 4 US Senators called on the government to increase tariffs on Chinese-made solar modules, cells and wafer imports under Section 301.
The tariff increase to 50% will apply to Chinese solar cells whether or not assembled into modules. Accusing China of indulging in 'unfair trade practices' to dominate up to 90% of certain parts of the global solar supply chain, the US says its 'nonmarket practices' are flooding global markets with artificially cheap solar modules and panels.
According to the White House, China with its policies undermines investment in solar manufacturing outside of the country, including in the US where the Biden administration is encouraging domestic manufacturing through its hugely popular Inflation Reduction Act (IRA) incentives. It credits the IRA to have spurred an 8-fold increase in US manufacturing capacity with nearly $17 billion in planned investments announced.
"The tariff increase will protect against China's policy-driven overcapacity that depresses prices and inhibits the development of solar capacity outside of China," stated the White House.
In its review report, the USTR says, "Increasing section 301 duties on solar products will help support domestic production in this strategic sector, decreasing reliance on China and providing additional leverage on China to eliminate the investigated technology transfer-related acts, policies, and practices."
Welcoming the development, the Executive Director of the Solar Energy Manufacturers for America (SEMA) Coalition Executive Director Mike Carr said the country needs to use every tool at its disposal to boost the US solar manufacturing industry.
"While we are still digging into the details, we're glad to see the Biden administration take a step to strategically re-align 301 tariffs to help onshore U.S. solar manufacturing and support solar manufacturing workers," added Carr. "We are hopeful that next steps will shortly follow, including fixing the Inflation Reduction Act's domestic content rules and trade enforcement, to level the playing field and ensure American solar workers have a real chance at fair competition."
The news of the tariff increase follows US solar manufacturers calling for the imposition of AD/CVD duties on solar cells and modules imported into the US via Cambodia, Malaysia, Vietnam and Thailand. Industry associations including the Solar Energy Industry Association (SEIA) warned of market uncertainty for the US PV industry (see US Solar PV Manufacturers Launch AD/CVD Petitions).
Another US solar manufacturers' consortium led by Hanwha Qcells has reportedly demanded the US administration to exempt bifacial solar panels from Section 201 tariffs (see White House May End Exemption For Bifacial Solar Panels).
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