WASHINGTON (AP) — President Joe Biden ordered emergency measures Monday to boost crucial supplies to U.S. solar manufacturers and declared a two-year tariff exemption on solar panels from Southeast Asia as he attempted to jumpstart progress toward his climate change-fighting goals.
His use of the Defense Production Act as well as his executive actions comes amid concerns from industry groups about the slowdown in the solar sector due to supply chain problems caused by a Commerce Department inquiry into possible violations of trade laws involving Chinese goods. Word of the White House’s actions caused solar energy companies to gain ground on Wall Street.
The Commerce Department declared in March it was examining solar panels imported from Thailand and Vietnam. They are concerned that these products may not comply with U.S. antidumping rules, which limit China’s imports.
Asked at the White House if Biden’s pause in tariffs was not a gift to China, press secretary Karine Jean-Pierre said he was invoking the Defense Production Act, “to make sure that he’s delivering for the American people.”
“He is putting the full force of the federal government behind supporting American clean energy producers,” Jean-Pierre said.
White House officials said Biden’s actions aim to increase domestic production of solar panel parts, building installation materials, high-efficiency heat pumps and other components including cells used for clean-energy generated fuels. They called the tariff suspension affecting imports from Thailand, Vietnam, Malaysia and Cambodia a bridge measure while other efforts increase domestic solar power production — even as the administration remains supportive of U.S. trade laws and the Commerce Department investigation.
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Commerce Department Secretary Gina Raimondo told a Senate panel in May that the solar inquiry is following a process set by law that doesn’t allow consideration of climate change, supply chains or other factors. She said Monday that she remains “committed to upholding our trade laws and ensuring American workers have a chance to compete on a level playing field.”
“The president’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments,” Raimondo said in a statement.
Clean energy leaders have long warned that the investigation — which could result in retroactive tariffs of up to 240% — would severely hinder the U.S. solar industry, leading to thousands of layoffs and imperiling up to 80% of planned solar projects around the country.
According to the department, rates of more than 200% on solar products wouldn’t apply to most imports. They instead typically apply to uncooperative companies that cannot differentiate themselves from China’s government or Communist Party.
Still, any possible punishment might have jeopardized one of Biden’s top clean energy goals and run counter to his administration’s push for renewable energy such as wind and solar power, advocates argue.
“The president’s announcement will rejuvenate the construction and domestic manufacturing of solar power by restoring predictability and business certainty that the Department of Commerce’s flawed inquiry has disrupted,” Heather Zichal, CEO of the American Clean Power Association and a former Obama administration official, said in a statement Monday.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, cheered Biden’s “thoughtful approach to addressing the current crisis of the paralyzed solar supply chain.”
“Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home,” Ross Hopper said in a statement.
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Not everyone within the industry supported this idea. First Solar Inc., a major solar panel manufacturer, said that freezing tariffs would grant “unfettered access to China’s state-subsidized solar companies for the next two years” and that using the Defense Production Act is “an ineffective use of taxpayer dollars and falls well short of a durable solar industrial policy.”
“The administration cannot stick a Band-Aid on the issue and hope that it goes away,” Samantha Sloan, the company’s vice president of policy, said in a statement.
The use of executive action comes as the Biden administration’s clean energy tax cuts, and other major proposals meant to encourage domestic green energy production, have stalled in Congress.
Defense Production Act is a federal law that allows for the government to control manufacturing production in order to support national defense. This tool has become more popular among presidents in recent times. It was used by the Trump administration to make medical supplies and equipment during the initial stages of the coronavirus epidemic.
In April, Biden used it to increase production of lithium and other mineral needed to drive electric cars. Last month, he used it again to prioritize boosting the nation’s supplies of baby formula amid a domestic shortage caused by the safety-related closure of the country’s largest formula factory.
Jean Su, director of the Center for Biological Diversity’s energy justice program, said in a statement that Biden’s announcement can “give critical momentum to the needed transition to solar energy.”
“We hope this use of the Defense Production Act is a turning point for the president, who must use all his executive powers to confront the climate emergency head on,” Su said.
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