Biden to exempt tariffs on solar panels from Thailand for 24 months

Thailand shipped US$1.07 billion worth of solar cells to the United States last year, making up 49% of the country’s total solar cell exports. (Photo: Industry Ministry)

WASHINGTON: US President Joe Biden will issue a proclamation on Monday that will allow solar panels to be imported to the United States from Thailand, Malaysia, Cambodia and Vietnam without risk of tariffs for a 24-month period, a source familiar with the matter told Reuters.

The action comes amid concern about the impact of the US Commerce Department’s months-long investigation into whether imports of solar panels from the four Southeast Asian nations are circumventing tariffs on goods made in China.

Biden also will invoke the Defense Production Act to drive US manufacturing of solar panels and other clean technologies in the future, with the support of loans and grants, the sources added.

“There is going to be this safe harbour timeout on the … collection of duties, and that’s at the heart of what’s going to save all of these solar projects and ensure that they are going forward,” said one source familiar with the White House’s plans.

State governors, lawmakers, industry officials and environmentalists have expressed concern over the investigation, which could result in retroactive tariffs of up to 250%.

It has essentially halted imports from Cambodia, Malaysia, Thailand and Vietnam, which account for more than half of US solar panel supplies and 80% of imports.

The investigation has had a chilling effect on the industry, say clean energy groups, some of which have asked Commerce Secretary Gina Raimondo to dismiss it, though she has said she has no discretion to influence it.

The source, who spoke on condition of anonymity, said Biden’s action would bring certainty back to the US solar market and allay companies’ concerns about having to hold billions of dollars in reserves to pay potential tariffs.

The investigation, announced at the end of March, could take 150 days or more to complete.

The issue has created a unique dilemma for the White House, which is eager to show US leadership on climate change, in part by encouraging use of renewable energy, while respecting and keeping its distance from the investigation proceedings.

Using executive action and invoking the DPA, which allows presidents some authority over domestic industries, allows Biden to take advantage of the tools available to him without stepping on the tariff inquiry.

In 2021, Thailand shipped US$1.07 billion worth of solar cells to the US, making up 49% of the country’s total solar cell exports.