US President Joe Biden crosses the South Lawn after disembarking from Marine One on his way back from Rehoboth Beach, Delaware, with the First Lady of the White House in Washington, DC, USA, June 5, 2022. REUTERS / Elizabeth Frantz
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WASHINGTON, June 5 (Reuters) – President Joe Biden will announce a 24-month duty-free exemption for solar panels in four Southeast Asian countries on Monday after an investigation froze imports and halted projects in the United States. the question.
The move comes amid concerns about the impact of a months-long investigation by the Commerce Department into whether imports of solar panels from Cambodia, Malaysia, Thailand and Vietnam are circumventing tariffs on goods made in China.
Biden’s actions will allay fears that companies will have to hold billions of dollars in reserves to pay potential tariffs, said a source familiar with the White House’s plans.
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“There will be an expiration of safe harbor time in … debt collection and this is at the heart of what will save all these solar projects and ensure that they move forward,” the source said.
Biden will also invoke the Defense Manufacturing Act to boost US production of solar panels and other clean energy technologies in the future, with the support of loans and grants, sources said.
Governors, lawmakers, industry and environmentalists have expressed concern about the investigation, which could lead to a retroactive duty of up to 250 percent.
The issue has created a unique dilemma for the White House, which wants to show US leadership on climate change, in part by promoting the use of renewable energy, while respecting and keeping its distance from the investigation.
Using executive action and invoking the DPA, which gives presidents some power over local industries, allows Biden to take advantage of the tools at his disposal without interfering with inquiries from the Department of Commerce.
A second source said Biden’s proclamation, relying on the authority of the 1930 trade law, would apply only to the four states and would go hand in hand with the investigation.
Depending on the outcome, tariffs may be imposed on panels imported after the 24-month period, but the threat of retrospective payments will disappear, the source added.
“If you bring things in during this 24-month period, regardless of the outcome of the investigation, there will be no such additional obligations,” the second source said.
The investigation essentially halted the flow of solar panels, which account for more than half of US shipments and 80 percent of imports.
This has had a chilling effect on the industry, according to clean energy groups, some of which have asked Trade Minister Gina Raimondo to reject it. Raimondo said she had no intention of influencing him.
“The president’s action is a much-needed respite from this industry-crushing investigation,” said Abigail Ross Hopper, president of the Solar Industries Association.
“During the two-year tariff suspension window, the US solar industry may return to rapid implementation, while the Defense Manufacturing Act is helping to expand US solar production.
Announced in late March, the investigation could take 150 days or more.
Biden had previously relied on the DPA to tackle infant shortages in the United States, increase domestic production of key minerals for electric vehicle batteries, and fight the COVID-19 pandemic through testing and vaccine production.
“This is a tool to do what we obviously have to do desperately, namely the rapid increase in domestic production capacity of solar panels,” said a second source familiar with the matter.
The administration was “very focused on providing reliable and sustainable supply chains at this critical time for our energy sector, for our ability to support our customers and deal with the climate crisis,” he added.
Increasing renewable energy, such as solar energy, is crucial to Biden’s goal of reducing greenhouse gas emissions in the United States by 50% to 52% by 2030 from 2005 levels, as well as decarbonizing the electricity grid. USA by 2035
The Commerce Department’s inquiry has prompted 19 state governors, 22 U.S. senators and dozens of members of the House of Representatives to express concern in letters to Biden.
“The launch of this investigation is already causing huge disruption to the solar industry and will severely damage US solar businesses and workers and increase spending on American families as it continues,” said a letter signed by senators, including Martin Heinrich, a Democrat. from New Mexico and Tom Tillis, a Republican from North Carolina.
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Report by Jeff Mason; Additional report by Nikola Groom; Edited by Clarence Fernandez
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