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Loss Outweighs Gain as U.S. Curbs China's Photovoltaic Industry

Source: Science and Technology Daily | 2022-05-19 11:49:38 | Author: YU Haoyuan

By YU Haoyuan

Even after the China-U.S. Joint Glasgow Declaration on Enhancing Climate Action in the 2020s, a declaration that ought to enhance environmental cooperation between two countries, U.S. suppression on China's new energy industry, especially the photovoltaic industry, is still not stopped.

Recently, a small American solar panel manufacturer Auxin Solar, filed a petition for the second time with the U.S. government, accusing Chinese companies of evading U.S. duties by illegally circumventing solar tariffs by routing their operations through four countries (Cambodia, Malaysia, Thailand, and Vietnam).

However, this petition seems to harm China without benefiting Auxin Solar and most U.S. companies. In early May, U.S. Department of Commerce (DOC) decided to launch an investigation into the matter. Auxin Solar has requested up to 250 percent tariffs on these imported solar panels and cells. This has caused widespread debate in the U.S. Many industry observers have claimed that the accusation from Auxin Solar seems untenable, and the investigation may be just another excuse to suppress China.

Eric Wesoff, the editorial director at Canary Media, considers this just a small company's business strategy, which has however been taken seriously by the DOC. 

According to The Wall Street Journal, on the surface, Chinese manufacturers investing in four Southeast Asian countries to avoid U.S. tariffs seems untenable. Cheaper labor looks like a "compelling enough reason." Moreover, if the ruling is upheld, only a much smaller list of American companies will benefit from it. Others like NextEra, one of the largest American solar developers, could be seriously negatively affected.

U.S.government officials also pointed out their concerns. "We have created so much chaos under this administration that nobody is even manufacturing panels for the U.S. right now," said Heather Zichal, a former White House climate adviser who is now the CEO of the American Clean Power Association. "This is because of regulatory decisions completely up to this administration."

"We need to repeal the existing job-killing solar tariffs, not add new ones," Sen. Jacky Rosen (D-Nev.) said in an email that called DOC's investigation "Misguided," according to a report from The Washington Post.

In fact, the U.S. working with China could be a win-win situation in building solar products. President Biden wanted the United States to cut its greenhouse gas emissions in half by the end of this decade, and China has its "30-60" carbon peaking and carbon neutrality goal. The two countries have shown their ambitions to build a greener globe, which is also why the Declaration could be signed.

If the U.S. had not started its solar trade war with China, both countries could have already made more contributions toward protecting the environment. According to The Washington Post, economists Sebastien Houde and Wenjun Wang believe that U.S. solar panel demand would have been 17.2 percent higher without the solar trade war between 2012 and 2018, avoiding seven million tons of carbon dioxide emissions.

It is reported that the results of DOC's investigation will emerge in late August, meaning there is still time for U.S. government to consider its future cooperation with China in this field.

Editor: 余昊原

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