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WASHINGTON — The Biden administration on Monday is poised to announce a two-year pause in imposing any new tariffs on the solar industry, following an outcry from importers who complained that the tariffs threatened wider adoption of solar power in the United States.
The decision is a victory for domestic solar installers, who say the tariffs will jeopardize the Biden administration’s goal of significantly reducing carbon emissions by the end of the decade. But that will go against the wishes of American manufacturers and labor unions, who are forcing the administration to place tougher barriers to cheap imports to help revive the local solar industry.
To address these complaints, the administration also plans to announce policies to help support the local solar industry, according to people familiar with the plans who declined to speak publicly ahead of the White House’s official announcement. Two people familiar with the controversy said these efforts will include using the powers of the Defense Production Act, which provides the president with expanded powers and funding to direct the activities of private businesses.
The Commerce Department was considering whether to impose the tariffs as part of a trade lawsuit accusing Chinese solar companies of trying to circumvent existing taxes by moving their operations out of China and to other countries. In recent years, major Chinese solar producers have established large operations in Vietnam, Malaysia, Thailand and Cambodia.
If the Department of Commerce found that factories were set up to circumvent US tariffs, management could retroactively impose tariffs on shipments to the US.
American solar companies said the prospect of further and retroactive tariffs is already having a chilling effect on imports. Groups like the Solar Energy Industries Association are lobbying the White House against the tariffs and welcomed the news on Monday that the administration will withhold the new taxes.
“Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and promote a solid solar manufacturing base here at home,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, in an emailed statement.
“During the two-year tariff suspension window,” he said, “the U.S. solar industry could return to rapid deployment as the Defense Production Act helps American solar production grow.”
Jim Tankersley contributing reporting.
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