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Biden renews Trump tariffs on imported solar panels for 4 years

US president Joe Biden has renewed for four years Trump-era tariffs on imported solar panels that were set to expire this weekend as his administration tries to boost US manufacturing of clean energy infrastructure.

But his administration said on Friday it would also continue to exempt the double-sided panels common in large projects from levies, and doubled the amount of solar cells, which make up solar panels, that can be imported before tariffs are applied from 2.5 gigawatts to 5GW of generating capacity, giving some relief to utilities and power producers worried about panel costs.

Opponents of the tariffs have argued that slapping duties on imported solar panels undermines Biden’s goal of making the US power grid carbon-free by 2035. Backers have said that curbing imports from Asia is crucial if the US is ever to significantly ramp up its domestic production of solar equipment.

Senior administration officials said the tariffs would help US manufacturers and build a North American solar supply chain. The officials said the US Trade Representative’s office would look to strike agreements with Mexico and Canada that would exclude them from the tariff regime.

Former president Donald Trump imposed emergency “safeguard” tariffs of 30 per cent on solar product imports in 2018, declining to 15 per cent over four years, in an attempt to protect American jobs. Late last year, the US International Trade Commission, the US’s independent advisory trade body, recommended a four-year extension of the tariffs with annual declines of 0.25 per cent per year to “prevent or remedy serious injury to the US industry”. 

The US imported 19.3 peak gigawatts of solar panels in 2020, up from 15.3GW in 2019, according to the US Energy Information Administration. The leading exporter to the US was Vietnam, followed by Malaysia, South Korea and Thailand.

According to the EIA, the price of solar panels declined in the decade from 2010, with the average value of shipments falling from $1.96 per watt in 2010 to $0.38 per watt in 2020. The EIA says lower supply chain costs and an oversupply of modules are “largely responsible” for the declining value.

However, some analysts have scaled back their forecasts for future US solar installations as cost inflation and supply congestion ripple through the industry this year.

In 2019, US-produced solar modules achieved a record market share of 19.8 per cent, the highest figure in a decade, according to the Coalition for a Prosperous America, a lobby group that advocates for US-based manufacturing.

The CPA called the White House decision “a gift to Beijing”. Zach Mottl, its chair, said the tariff extension was “in name only” because it excluded so-called bifacial panels.

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The move would “ensure a tsunami of cheap Chinese solar products, made with forced labour and produced by dirty coal-fired power plants, flood into the US,” Mottl said.

The decision received mixed reactions from groups representing the US solar power industry. Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, said the administration had reached a “balanced” solution.

Some trade restrictions remain in force on imports of solar products from China. Last summer, the Biden administration took punitive actions against Chinese solar product manufacturers in a crackdown over the internment of Uyghurs and Muslim minorities in Xinjiang province.

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