Anti-dumping news dump: Commerce memo stokes fears, Auxin’s petition based on misinterpreted data

pile of legal papers

The solar industry and at least 85 members of Congress are applying intense pressure on the Department of Commerce and the Biden Administration to issue a determination in the anti-dumping trade case ahead of the August 29 deadline. Word is the Biden Administration is also not pleased with this situation either. Unfortunately, the Administration technically has no role in this – it isn’t policy; it is a legal question.

We have been diligently working on an overly long Buzz article for our next print issue (subscribe here) that tries to put this whole mess in context. But updates are flying around too fast and furious to wait. Here’s a portion of that article along with an eyebrow-raising find by another news outlet this week.

Is Congress calming fears? Or preparing everyone for a finding of circumvention?

Commerce Secretary Gina Raimondo in a May hearing before Congress said that “It is true Commerce would be permitted to impose a tariff at that excessive level. That is exceedingly unlikely, which is to say that level of a tariff is only reserved in outside cases when you can’t tell the difference between the company and, say, the Communist Party of China. The last 150 times we’ve done this since 2012, we’ve come out in the 10, 11, 12 percent range.”

Why she mentioned those 150 cases is hard to fathom because the rates set in the 2012 solar AD/CVD case against Chinese products are the only ones that matter, and the China-wide anti-dumping rate is set at nearly 240 percent.

The goal of this statement, I assume, is to assuage everyone’s fears that her Department would levy those crazy-high duty rates in the event of a finding of circumvention.

Commerce also issued a memo on May 2 to clarify points of interest that also seemed intended to calm those fears. However, it has only muddied things further.

For starters, the memo explicitly mentioned the complexity of this case. This could be interpreted a few ways, but one way stated to me by a legal expert is Commerce could be putting people on notice that, based on the facts of this case, they may be forced to develop approaches that have not been used in past circumvention inquiries.

Regarding potential duties set on imports from the facilities in Southeast Asia in the event of an affirmative ruling, that May 2 memo notes that if Chinese-origin wafers were supplied by a Chinese manufacturer with a company-specific rate, then “the cash deposit rate for the relevant imports from the third country will be equal to that Chinese manufacturer’s and/or exporter’s company-specific rates.”

“While in theory that sounds like a good proposal that would allow companies to have more certainty if Commerce goes affirmative,” states Lynn Kamarck, McDermott International Trade Counsel, formerly Senior Counsel for antidumping duty (AD) and countervailing duty (CVD) proceedings before Commerce, during a recent webinar roundtable discussion. “As a practical matter it doesn’t seem to accomplish what Commerce presumably hoped it would because these input providers for the most part just do not have separate rates.”

Requiring company-specific certifications of origin means that Commerce is going to investigate the supply chain in greater detail than it has in prior circumvention investigations. This could increase the difficulty of satisfying Commerce that circumvention is not taking place. Any company that doesn’t cooperate sufficiently in the investigations will be excluded from the opportunity to certify their final product as not being a product of China.

As for the current rates of listed companies (as of May 19), they vary widely:

  • BYD, JA Solar, others: 95.5%
  • Trina: 92.52%
  • ET Solar, others: 4.06%
  • Canadian, Chint, Jinko, LONGi, Risen, Yingli, others: 0%
  • China-wide/non-listed: 238.95%

Note that these are just the cash deposits at this time. Final rates will not be published until 2023-’24, and several companies are going through an administrative review right now. Companies that go through admin review have consistently received much lower anti-dumping rates than the 238.95% applied to non-listed companies.

For wafers that come from China from non-listed companies though, it’s unclear how those would be handled, but one could assume those would receive the high 238.95% China-wide/non-listed rate. Note that one-third of the China supply of wafers going into the named countries in the petition is from a company that does not have their own separate rate.

Meanwhile, Auxin’s petition relied on misinterpreted data

The sleuths at Canary Media learned from BloombergNEF’’s Jenny Chase and Pol Lezcano that Auxin misinterpreted their data in the original petition that caused this entire mess in the first place. Auxin’s case in the petition relied heavily on the interpretation of that data. Here’s an example, highlighted by Chase and Lezcano:

Auxin also points to a statement in the BloombergNEF Report that “the majority of goods the U.S. imports {i.e., solar panels} arrive from Southeast Asia post assembly,” but “70% of the actual value of that equipment {solar panels} accrues to China where key, pre-assembly steps in the making of the equipment take place, including production of solar-grade silicon, ingots, wafers and cells.”

The BNEF researchers told Canary Media that the 70% data point refers to the “cash cost” of the components making up finished solar panels. It does not include the investment in and depreciation of factories that produce solar cells and modules in the four countries in question, not to mention the general and administrative expenses of operating them.

“It still costs a lot of upfront capex to build a new factory, regardless of where you site it,” Chase and Lezcano noted.

So, this would hurt the case that the work being done in these countries is insignificant, which is the entire question before Commerce in initiating and ruling on an anti-dumping case.

In light of that revelation, the American Council on Renewable Energy (ACORE) is calling on Commerce officials to put an immediate end to its tariff investigation, which is devastating the U.S. solar industry.

“There is now direct evidence from BloombergNEF researchers that the data Commerce officials used to bring America’s booming solar industry to its knees was misinterpreted, and should have never been relied upon as a basis for Commerce’s action,” said ACORE’s President and CEO Gregory Wetstone. “This development follows months of needless disruption to the U.S. solar market, including significant project delays, cancellations and layoffs that have undoubtedly set us back in achieving our clean energy and climate goals. American workers, electricity consumers, and anyone concerned about combatting climate change have all paid a price. “Given this important new information, we call on Commerce Secretary Gina Raimondo to put an immediate end to this inquiry and the possibility of retroactive solar tariffs.”

Please stay tuned for much more from us on the anti-dumping trade case. And reminder to become a subscriber to Solar Builder. It is all of our best stuff, delivered quarterly. And, hey, it’s free. This next issue has a big utility-scale focus.

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  • William Parker
    May 23, 2022 10:48:02

    Where did you find the rate information? I’ve found it very difficult to track this information down.