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The United Commerce Department will finalize a decision on Friday to impose import duties on solar panel manufacturers who made their products in Southeast Asian nations in a bid to avoid tariffs on Chinese-made goods. The Commerce probe found that units of Chinese companies BYD, Trina Solar, Longi Green Energy and Canadian Solar (NASDAQ:CSIQ) were dodging U.S. tariffs on Chinese solar panels by finishing their products in Cambodia, Malaysia, Thailand and Vietnam before shipping them to the U.S. market. The U.S. has had anti-dumping duties for a decade now on Chinese-made solar products after the government determined that Chinese companies were receiving unfair government subsidies that made it hard for U.S. panel manufacturers to compete.
The tariffs will hurt buyers of solar panels that rely on cheap products from China and Asia to make their projects competitive. However, the tariffs are bound to be music in the ears of the small U.S. solar manufacturing industry, which has long struggled to compete with Chinese goods.
Meanwhile, the U.S. government is currently scrutinizing Chinese electric-vehicle battery and car parts supply chains for possible links to forced labor. Under the newly enacted Uyghur Forced Labor Prevention Act (UFLPA), the U.S. has banned the importation of goods made in Xinjiang, China, where the U.S. believes Chinese authorities have set up labor camps for Uyghurs and other Muslim minority groups. This could signal difficult times ahead for EV makers, who might be required to provide solid proof that their supply chains are free of any form of forced labor.
Two years ago, CBP banned U.S. imports of a key solar panel material from Chinese-based Hoshine Silicon Industry Co over forced labor allegations. The U.S. Commerce Department also restricted exports to Hoshine, the paramilitary Xinjiang Production and Construction Corps (XPCC), Xinjiang Daqo New Energy Co, a unit of Daqo New Energy Corp. (NYSE:DQ,) Xinjiang East Hope Nonferrous Metals Co, a subsidiary of Shanghai-based manufacturing giant East Hope Group; and Xinjiang GCL New Energy Material Co, part of GCL New Energy Holdings Ltd.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.