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For the second time in less than a year, the U.S. Department of Commerce is being asked to determine whether or not a handful of solar manufacturers that are based in China but that have operations across Southeast Asia are engaging in unfair trade practices.

In a 105-page petition, Auxin Solar, a minority- and woman-owned domestic producer of solar modules in San Jose, California, asked Commerce to determine that solar cells and modules assembled in Malaysia, Thailand, Vietnam, and Cambodia are circumventing and undermining the effectiveness of U.S. trade remedy laws.

“The Government of China and major Chinese producers simply refuse to trade fairly,” said Mamun Rashid, CEO of Auxin Solar in a statement.  He said that rather than ending Beijing’s subsidization of the solar supply chain and raising prices, the Chinese producers moved operations to another country as an export platform to “continue assaulting the U.S. market with incredibly cheap products.” 

‘Frivolous’

In a statement, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, called the petition “frivolous” and said the trade group would “aggressively” oppose it.

“This is yet another attempt to abuse U.S. trade laws and cause serious economic harm to the American solar industry and its 230,000 workers, shockingly, all at the behest of a single company,” Hopper said.

The petition said that the anti-circumvention statute does not limit the size of the party that files an allegation. It said that domestic producers like Auxin Solar “would have much more capacity” if they could sell crystalline silicon photovoltaic (CSPV) modules under “fair competitive conditions.”

It said that at present, low-cost CSPV cell and module imports from Malaysia, Thailand, Vietnam, and Cambodia that utilize inputs from affiliated Chinese suppliers “continue to undercut domestic producer pricing at key accounts” and limit the ability for Auxin Solar to reinvest and expand.

15 companies

Inside a JinkoSolar Smart Facility. The company is once again at the center of anti-dumping and circumventing accusations from a U.S. solar module manufacturer (Courtesy: JinkoSolar)

The petition named 15 module manufacturers that it alleged are circumventing U.S. anti-dumping laws. The companies are LONGi Malaysia and Vietnam, Jinko Solar, JA Solar, Trina Solar, Canadian Solar, Talesun, Light & Hope, GCL, Boviet Solar, Green Wing Solar, HT Solar, New East Solar, Enalex, Shenglong PV-Tech, and Jintek.

Last November, Commerce rejected a similar petition by an anonymous group of solar companies that sought tariffs on a handful of companies that import modules from Malaysia, Thailand, and Vietnam.

The request had been made by American Solar Manufacturers Against Chinese Circumvention (A-SMACC) and sought anti-dumping and anti-circumvention (AD-CVD) tariffs. In a November 10 decision, Abdelali Elouaradia, director of the Commerce Department’s AD-CVD office, said that A-SMACC’s bid to keep the names of its member companies from the public prevented Commerce from gathering needed information for any inquiry.

Elouaradia wrote that “not disclosing A-SMACC members’ names publicly hampers interested parties from fully commenting on the requests for circumvention inquiries and may hamper them from commenting on certain issues that could arise if Commerce were to initiate circumvention inquiries.”

In July, the Energy Information Administration’s (EIA’s) 2020 Annual Solar Photovoltaic Module Shipments Report, said that solar PV imports to the U.S. totaled just under 19.3 million peak kilowatts, and exports totaled 376,483 peak kilowatts.

The EIA report listed Vietnam as the top source of PV imports to the U.S. at 8.1 million peak kilowatts. South Korea and Thailand combined were second at 4.4 million peak kilowatts, and Malaysia was third at 3.2 million peak kilowatts. The report lumped together imports from China, Hong Kong, Singapore, and Taiwan, which totaled less than 950,000 peak kilowatts.

Allegations

The Auxin petition, which was filed February 8, alleges that imports from Malaysia, Thailand, Vietnam, and Cambodia have risen by 868% over the last decade and “replaced Chinese imports completely.” The petition said that major producers in these countries “are all affiliated with Chinese producers of upstream inputs” and that their cost structure and pricing “is no different than if they still produced in China for the U.S. market.” 

The petition alleges that some Chinese producers even admit that they set up facilities outside of China to avoid U.S. duties. For example, it said that Talesun Thailand, which is part of a Chinese group, advertises circumvention on its website stating that “we offer a solution adapted to markets affected by anti-dumping laws such as the United States.”  

And, it alleges that Boviet Solar, a Vietnamese assembler that is owned by Chinese producer Boway, offers cost savings to buyers because “Vietnam is not a U.S. listed Anti-dumping and Countervailing region.”  

In his statement, Rashid said that key upstream inputs in module manufacturing came from China with only assembly taking place outside of China. “This is textbook circumvention,” he said. Renewable Energy World asked Auxin Solar for an interview to discuss its allegations but has not had a response.

‘Pales in comparison’

The petition alleges that the level of investment in the third countries “pales in comparison” to the level of investment in integrated supply chains in China. It said that upstream production of polysilicon, ingots, and wafers requires investments in the billions of dollars, while cell and module assembly/completion operations require a “small fraction of that amount to set up shop.”

A decade ago, Commerce and the U.S. International Trade Commission found that dumped and subsidized imports of Chinese CSPV cells and modules caused material injury to the domestic U.S. CSPV industry. Antidumping and countervailing duty orders were put in place in an effort to address those trade practices. The Auxin petition alleges that Chinese companies sidestepped the import duties by setting up operations outside of China.

The petition alleges that Beijing’s Going Out Policy and Belt and Road Initiative “greased the skids” for Chinese companies to complete production in Malaysia, Vietnam, Thailand, and Cambodia and so circumvent existing AD and CVD Orders.

Commerce has 30 days to decide whether to move forward on the request, but may extend that deadline for an additional 15 days.  Once underway, Commerce would have to complete the inquiry within 300 days. In the event of an affirmative determination, duties may apply to circumventing solar cells and modules on each import after the date of Commerce’s initiation.