Commerce issues final ruling in Auxin Solar tariff case
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Commerce issues final ruling in Auxin Solar tariff case

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The U.S. Department of Commerce has issued a final ruling in the Auxin Solar tariff case, a long-awaited decision stemming from an investigation that gripped the solar industry for more than a year.

Commerce determined that solar cells and modules completed in Cambodia, Thailand, Malaysia, and Vietnam from parts and components manufactured in China are circumventing U.S trade duties against China. The agency determined that country-wide determinations were appropriate given their findings.

Immediately following the ruling, Abigail Ross Hopper, CEO of the Solar Energy Industries Association, called the ruling “out of step with the administration’s clean energy goals.”

“Auxin Solar’s allegations of circumvention were meritless from the beginning and the inquiries have caused uncertainty in the U.S. market at a time when solar energy is on the rise. The final affirmative determinations only perpetuate current supply problems, given the lack of adequate domestic supply of cells and modules,” Ross Hopper said in a statement.

In February 2022, San Jose, California-based solar manufacturer Auxin Solar alleged unfair trade practices from Chinese suppliers and asked Commerce to intervene. The Department of Commerce began investigating in March 2022 whether solar manufacturers in China were using four countries in Southeast Asia — Thailand, Malaysia, Cambodia, and Vietnam — as a conduit to evade American tariffs.

Commerce released a preliminary determination in December 2022 that found that the Thailand operations of Canadian Solar and Trina Solar, as well as BYD Cambodia and Vina Solar Vietnam (LONGi), have circumvented U.S. tariffs.

Commerce ultimately determined that subsidiaries of Chinese solar manufacturers BYD, Trina Solar, Longi Green Energy, and Canadian Solar were circumventing U.S. trade duties, as were companies that failed to respond to the agency’s questionnaire in a timely manner.

Companies will be required to self-certify that they are not circumventing U.S. trade duties against China in order to be exempt from the new order, which will be subject to audit. From Malaysia, Hanwha Qcells and Jinko are exempt from the additional duties, as is Boviet Solar in Vietnam.

Solar cells made in one of the four Southeast Asian countries, even if made from wafers from China, that are then exported to a non-inquiry country and further assembled into modules or other products there, before exportation to the United States, are not subject to Commerce’s final circumvention findings. 

The Factor This! podcast broke down all angles of the Auxin Solar tariff petition in a four-part series, which included an exclusive interview with Auxin Solar CEO Mamun Rashid. Subscribe today wherever you get your podcasts.

Pt. 1: Who is Auxin Solar? An exclusive interview with the CEO behind the bitter solar tariff fight

Pt. 2: Inside the solar industry’s $5 million fight against new tariffs

Pt. 3: Rebuilding domestic solar supply chains will hinge on incentives, not tariffs, experts say

Pt. 4: How the solar industry swayed Biden on import tariffs

Update: Commerce Department issues a preliminary determination in the Auxin Solar case

President Biden issued a two-year pause on the tariffs in June 2022 after fears arose that Commerce’s investigation could result in retroactive tariffs, following a $5 million pressure campaign from the solar industry. Biden vetoed a bipartisan Congressional effort to end the tariff pause in May 2023, saying the tariff moratorium was meant to offer a “bridge” to allow new domestic manufacturers to ramp production capacity and capitalize on investments made under the Inflation Reduction Act. White House officials said Biden does not intend to extend the tariff pause when it expires in June 2024 due to “strong trends in the domestic solar industry.”

Tim Brightbill, a partner and co-chair for the international trade practice at D.C. law firm Wiley Rein, called the positive affirmation of circumvention a “win” on its face for domestic producers and those concerned with the evasion of trade duties by Chinese companies, but he added that the effects are “largely negated” by President Biden’s proclamation.

While not involved in the Auxin Solar case, Brightbill represented domestic solar manufacturers in 2012 in the first round of solar anti-dumping and countervailing duty actions against China, and again in 2015 when penalties were expanded to Taiwan.

Domestic solar production has ramped up in recent years, but the US still relies heavily on imported foreign solar modules. The four Southeast Asian countries in question — Thailand, Malaysia, Cambodia, and Vietnam — accounted for 80% of US solar panel imports during Q2 2023, according to research from Panjiva, the supply chain research unit of S&P Global Market Intelligence. Vietnam accounted for the largest share of US PV module imports in the second quarter, with 31.2%, followed by Thailand with 22.5%, Cambodia with 13.7%, and Malaysia with 12.9%.

Brightbill believes that U.S. manufacturers are likely to be harmed in the near term as buyers rush to import Southeast Asian modules before the expiration of President Biden’s proclamation next June.

This story will be updated once the Dept. of Commerce releases the final ruling

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