U.S. President Joe Biden crosses the southern turf after disembarking from Marine One as he returns from Rehoboth Beach, Delaware, with the First Lady at the White House in Washington, USA, June 5, 2022. REUTERS / Elizabeth Frantz
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WASHINGTON, June 5 (Reuters) – President Joe Biden on Monday will declare a 24-month tariff exemption for solar panels from four Southeast Asian nations after an investigation froze imports and disrupted projects in the United States, they said sources familiar with the matter told Reuters.
The move comes amid concerns over the impact of the Commerce Department’s months-long investigation into whether imports of solar panels from Cambodia, Malaysia, Thailand and Vietnam are circumventing tariffs on goods made in China.
Biden’s action would alleviate corporate concerns about having to hold billions of dollars in reserves to pay possible tariffs, a source familiar with White House plans said.
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“There will be this safe harbor waiting time in the … homework collection, and that is 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 Production Act to boost U.S. manufacturing of solar panels and other clean energy technologies in the future, backed by loans and grants, sources said.
State governors, lawmakers, industry officials and environmentalists have expressed concern about the investigation, which could have resulted in retroactive rates of up to 250 percent.
The issue has created a unique dilemma for the White House, which is eager to show U.S. leadership in climate change, in part by encouraging the use of renewable energy, while respecting and keeping its distance from the procedures. research.
The use of executive action and the invocation of the DPA, which gives presidents some authority over domestic industries, allows Biden to take advantage of the tools at his disposal without stepping on the Department of Commerce consultation.
A second source said Biden’s proclamation, based on the authority of a 1930 trade law, would apply to only four countries and be applied in parallel to the investigation.
Depending on the outcome, tariffs could be charged on imported panels after the 24-month period, but the threat of retroactive payments would be off the table, the source added.
“If you introduce things during this 24-month period, regardless of the outcome of the investigation, there will be no such additional duties,” the second source said.
The investigation essentially stopped the flow of solar panels, which account for more than half of U.S. supplies and 80 percent of imports.
It had a devastating effect on the industry, according to clean energy groups, some of whom called on Secretary of Commerce Gina Raimondo to remove him. Raimondo said he had no discretion to influence it.
“The president’s action is a much-needed isolation of this industry’s crushing well,” Abigail Ross Hopper, president of the Solar Energy Industries Association, said in a statement.
“During the two-year tariff suspension period, the U.S. solar industry may return to rapid deployment as the Defense Production Act helps grow U.S. solar manufacturing.”
Announced in late March, the investigation could take 150 days or more to complete.
Biden has already called on the DPA to address the shortage of infant formula 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.
“It’s a tool to do what we obviously have to do desperately, which is to rapidly increase the national manufacturing capacity of“ solar panels, ”the second source familiar with the matter said.
The administration is “very focused on making sure that there are reliable and resilient supply chains at this critical time for our energy sector, our ability to support our consumers and to cope with the climate crisis.” added.
Increasing renewable energy such as solar is crucial to Biden’s goal of reducing US greenhouse gas emissions by between 50% and 52% by 2030, compared to of 2005, as well as decarbonizing the U.S. power grid in 2035.
The Commerce Department investigation has led 19 state governors, 22 U.S. senators and dozens of members of the House of Representatives to express their concern in letters to Biden.
“The start of this investigation is already causing a massive disruption to the solar industry and will severely hurt U.S. businesses and solar workers and increase costs for American households as it continues,” a letter said. by senators, including Martin Heinrich, a Democrat. of New Mexico, and Thom Tillis, a Republican from North Carolina.
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Report by Jeff Mason; Additional report by Nichola Groom; Edited by Clarence Fernandez
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