Solar

This legislative tool could help Congress undo Biden’s solar tariff pause

This legislative tool could help Congress undo Biden’s solar tariff pause
(Courtesy: Martin Magnemyr/Unsplash)

A bipartisan group of lawmakers in Congress is hoping to use a legislative tool to roll back an executive order that paused for two years any new tariffs on solar modules imported from Southeast Asia.

The group aims to use the Congressional Review Act to repeal the order, which was issued by President Joe Biden in June 2022 and later codified by the Dept. of Commerce.

Bill author Rep. Dan Kildee (D, MI-08) called the pause on new tariffs "unacceptable" given that Commerce has found that some solar manufacturers are circumventing trade duties against China.

LISTEN: What's next for solar tariffs? Market analyst Paula Mints discussed the Commerce Department's preliminary determination in the Auxin Solar investigation on the Factor This! podcast.

The Congressional Review Act (CRA) allows Congress to repeal rules enacted by the executive branch if they were enacted within 60 legislative days of the end of the last legislative session. To repeal an eligible rule, lawmakers must introduce CRA legislation within 15 days of a new legislative session.

While a simple majority is required in both chambers for passage, a CRA bill must pass the U.S. House of Representatives within 60 calendar days of its introduction, or it expires.

Kildee introduced the legislation with Representatives Bill Posey (FL-08), Bill Pascrell (NJ-09), Bob Latta (OH-05), Terri Sewell (AL-07) and Garret Graves (LA-06).

Commerce launched an investigation in response to a petition by Auxin Solar, which alleged that solar modules imported from Malaysia, Thailand, Cambodia, and Vietnam were circumventing existing tariffs against China.

GO DEEPER: Listen to Auxin Solar CEO Mamun Rashid discuss the Auxin Solar tariff petition on the Factor This! podcast.

In its preliminary determination, Commerce identified the Thailand operations of Canadian Solar and Trina Solar, as well as BYD Cambodia and Vina Solar Vietnam, for violating AD/CVD rules. Other companies also under investigation — New East Solar Cambodia, Hanwha Q CELLS Malaysia, Jinko Solar Malaysia and the Vietnam operations of Boviet Solar — were cleared as part of the investigation.

In a press release, Kildee said repealing the order would "enforce U.S. trade law as Congress intended and help America’s domestic solar manufacturing industry grow to meet our nation’s energy needs."

Biden issued the pause following a $5 million pressure campaign from solar industry trade groups. Heather Zichal, the former CEO of the American Clean Power Association, at one point accused the Biden administration of "empty rhetoric" for allowing the investigation to proceed.

Southeast Asia accounts for around 80% of U.S. solar module supply. The announcement of the investigation, and the potential for retroactive tariffs, brought the industry to a halt last year. As a result, solar installations declined by 23% in 2022.

Industry trade groups and solar developers have advocated for a glidepath before new tariffs are issued to realize incentives for domestic manufacturing within the Inflation Reduction Act.

Even if the bill is passed, it's unclear how effective this legislative maneuver would ultimately be, given that President Biden could reinstate his executive order.