The House Ways and Means Committee voted 26-13 on Wednesday to nullify a Biden administration move to waive tariffs on solar energy equipment routed from China through four other Asian nations before arriving in the United States.
All Republican panel members supported the resolution, as did Rep. Terri A. Sewell, D-Ala., who has steel-making interests in her district.
The resolution, co-sponsored by five Republicans and five Democrats, would undo a Biden administration decision to lift import tariffs on solar parts made with Chinese parts but assembled in Cambodia, Malaysia, Thailand or Vietnam, then sent to the U.S.
In violation of trade law, Chinese solar firms have used this technique to avoid tariffs, a preliminary Commerce Department investigation found.
“American workers and consumers are being cheated by this behavior,” Rep. Jason Smith, R-Mo., the committee chairman, said.
The measure could hamper the U.S. solar installation industry and crimp the climate goals of the Biden administration, which set an objective in 2021 for the country to run entirely on zero-emission electricity by 2035.
The U.S. relies on foreign sources for roughly 80 percent of its solar demand, according to the International Energy Agency figures.
Members offered no amendments during the markup.
This dispute over solar tariffs and Chinese manufacturing originated with a request a California solar panel company, Auxin Solar, made last year to Commerce to determine if Chinese solar firms were evading U.S. tariffs by performing light assembly in the other nations before shipping their products stateside.
In December, the Commerce Department issued a preliminary decision to reinstate tariffs in June 2024, finding that Chinese firms have been evading these fees.
The department’s investigation is not complete.
“The final decision for these inquiries is scheduled to be announced on May 2, 2023, but this deadline may be extended,” a department spokesperson said Monday.
Smith and other committee Republicans criticized the administration’s decision to lift the tariffs, calling it “misguided.”
Before the vote, a committee staffer said tariffs would be applied retroactively on solar materials that have already been installed in the U.S. if the measure becomes law.
‘Upheaval’
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, which represents the domestic industry, said ending the administration’s two-year waiver would “spark upheaval” in the industry.
“The United States currently lacks the capacity to produce solar panels and cells in adequate volumes to meet domestic demand,” she said. “This strategic approach protects existing jobs while new ones are added, but it also helps sustain the robust environmental, national security and job-creating benefits offered by U.S. solar deployment.”
“I can only imagine what the ensuing chaos would do to future deployment,” said Rep. Donald S. Beyer Jr., D-Va., who voted against the resolution.
He cited a U.N. report, released last month, that found humanity has a sliver of time remaining to avert debilitating climate change.
“We simply don’t have time to lose,” Beyer said.
Democrats said the trade waiver buys the domestic solar industry time to assemble its own manufacturing base and break away from reliance on China.
“While the administration’s emergency order is not perfect, it is a short-term intervention that gives solar projects in the pipeline a needed bridge,” said Rep. Judy Chu, D-Calif.
“It would cost American jobs,” Rep. Mike Thompson, D-Calif., said of the resolution. “It would make it harder, not easier, for America to become energy independent in the long run.”
Reps. Bill Pascrell Jr., D-N.J., Lloyd Doggett, D-Tex., and Richard E. Neal, D-Mass., did not vote, nor did Rep. Dan Kildee, D-Mich., who is recovering from surgery following a cancer diagnosis.
Pascrell and Kildee are co-sponsors of the resolution. Sewell read a letter from Kildee in favor of the measure.
“We need to enforce our current trade laws and strengthen our ability to fight unfair trade practices,” Kildee said in the letter. “We cannot allow foreign solar manufacturers to violate trade laws, especially when it comes at the expense of American workers and American businesses.”
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