Biden chooses climate agenda over allies in manufacturing solar tariff loophole

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President Joe Biden extended Trump-era tariffs on solar energy imports by four years on Friday, but dealt a blow to U.S. solar makers by leaving an exemption that allowed imports of China-subsidized panel technologies to flood the market.

The decision is a boon for renewable energy developers, who continue to have access to cheap overseas supplies, particularly the double-sided solar panels used by most major solar projects, which are helping to meet the government’s climate targets. The move comes as a disappointment to US solar manufacturers and unions who have advocated restrictions to safeguard American jobs.

Though touted as a middle ground, the Biden administration’s concession has shaken businesses. Former President Donald Trump introduced the solar tariff regime in 2018 to boost US manufacturing, but the loophole in bifacial panels, a then-nascent technology, quickly undermined the policy, and attempts to reclaim them met with little success.

ADMINISTRATION DIVIDED ON DUTY EXEMPTION FOR CHINESE SOLAR PANELS

About 80% of solar panels are made in China, where the government has heavily subsidized the industry, relies on forced labor, and has discarded panels to gain market share.

The International Trade Commission had recommended extending tariffs because imported solar systems posed a threat to US manufacturers. However, the final decision rested with the President.

Under Biden, who took office with promises to boost American jobs, solar manufacturers have been pushing to close the gap, hoping their efforts would align with the new administration’s goals for workers and green energy. That didn’t happen.

Manufacturing is a small segment of the US solar industry, with most jobs focused on installing modules, but lawmakers have called for bringing the solar supply chain home amid concerns Washington is ceding a major opportunity to China.

Ohio Sens. Sherrod Brown, a Democrat, and Rob Portman, a Republican, and Democratic Rep. Marcy Kaptur and Tim Ryan issued a statement Friday calling the bifacial exclusion a “disappointing, misguided decision” that “American Workers and manufacturers are currently undermining when domestic solar production expands dramatically.”

“The administration is missing the best opportunity in a generation to ensure that the United States leads the way in manufacturing solar supply chain components,” lawmakers said.

In a call last week, Senator Brown urged Biden’s chief of staff, Ron Klain, to follow the ITC recommendation. The response was perfunctory, a source said. Portman has also actively pushed the White House, including Klain and Biden adviser Steve Ricchetti, and received an equally cold reception.

“They would just say, ‘Understood. Thank you,” said this person.

A spokesman for Brown and Portman did not respond to a request for comment as of press time.

Senior administration officials defended the move, arguing that expelling the bifacial panel was necessary to ensure projects proceed at the pace and scale needed to meet Biden’s goals.

“Joe Biden ran for president with a promise to restore the backbone of this country, the middle class,” officials said. “His North Star will always be a simple question: What is best for American workers and American industry?”

They called the announcement a significant step forward for the president’s plans to rebuild a strong North American solar supply chain that meets his clean energy and climate goals while creating good jobs and limiting reliance on foreign suppliers. The tariffs, they said, would not be enough to get the parts needed to make the panels back to the core.

“We have consulted with all sectors of the solar industry, and all agree that Section 201 tariffs alone will not bring back solar cell production or increase module production enough to meet U.S. needs,” the officials said.

Republican Kansas Senator Roger Marshall, who recently issued a joint letter urging Biden to protect solar companies, said Washington Examiner that the United States should not sacrifice its independence from renewable energy at the expense of short-term political ambitions.

“Domestic manufacturers simply cannot compete with Chinese imports, which are backed by government subsidies. If solar and other renewable energies are the future of energy production as the left claims, why does this administration want to give control of that future to China?” Marshall said in a statement. “We must invest in American manufacturing and maintain our energy independence and not rely on enemy nations to achieve short-term political goals.”

U.S. manufacturers faced significant hurdles as top Biden climate advocates, including Gina McCarthy, the White House national climate adviser, backed policies that would lead to faster adoption of solar power.

McCarthy said the US could not meet its climate goals without China, a source said, and pressed Klain, Ricchetti and other presidential aides on the issue while declining calls from lawmakers.

At the same time, China has ramped up polysilicon production and continued to subsidize its production of a crucial solar component that human rights defenders have said is of concern. The world’s second-largest polysilicon producer is based in China’s far western region of Xinjiang, where the government operates a massive program of detention, surveillance and forced labor.

There is no cell production in the USA, the main component of polysilicon panels. Biden’s Friday proclamation doubled the quota for cell imports. Officials said the US imported these and other components mostly from Southeast Asia.

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The senior officials touted an option they said could make manufacturing competitive while competing against imports: passage of Biden’s trillion-dollar welfare spending bill. This, they argued, would create 25,000 new jobs in solar manufacturing and provide tax credits to make manufacturing competitive with imports.

Biden’s “build back better” agenda is “dead” for now, according to West Virginia Democratic Republic Senator Joe Manchin, whose tightrope negotiations with the White House collapsed under tremendous pressure last year.

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