The U.S. House of Representatives on Friday voted to repeal President Joe Biden’s suspension of tariffs on solar panels from Cambodia, Malaysia, Thailand and Vietnam, nations that collectively represent a majority of country’s supply of panels.
The decision comes after the White House last year waived tariffs on solar panel imports from the Southeast Asian nations for two years and invoked the Defense Production Act to bolster domestic solar panel manufacturing.
The tariff moratorium was imposed to keep solar panels coming into the country as the U.S. boosts capacity. Solar energy is a key step toward reaching the White House’s climate goals.
The president had issued the moratorium amid a Commerce Department probe into whether companies were circumventing tariffs on Chinese shipments of solar products to the U.S. Commerce was looking at a complaint alleging that eight solar companies manufacture solar cells and components in China, then send those cells and modules to Cambodia, Malaysia, Thailand and Vietnam for “minor processing” before exporting them to the U.S. The department preliminarily found that four of the eight companies were attempting to bypass U.S. duties by doing minor processing in one of the Southeast Asian nations.
Supporters of the House resolution argue that the country is too dependent on other nations like China for clean energy and should enforce trade laws that will support country’s domestic solar supply chains.
The House passed the resolution in a 221-202 vote, with 12 Democrats joining most Republicans to vote in favor. The legislation now facesreview by the Senate. The president has pledged to veto congressional efforts to repeal the solar tariff waiver. A veto could only be overturned with a two-thirds Senate majority.
If the two-year moratorium is lifted, U.S. solar developers could face a total of $1 billion in retroactive tariffs, according to the Solar Energy Industries Association. The legislation could also eliminate 30,000 jobs and $4.2 billion in domestic investment, the group estimated.
Abigail Ross Hopper, SEIA’s president and CEO, said in a statement that the U.S. can’t produce enough solar panels and cells to meet demand, and the remaining months of Biden’s moratorium provides the country time to close that gap.
“The United States can get there and become a global leader in clean energy manufacturing and development,” Hopper said. “Overturning the moratorium at this stage puts that future at risk.”
The Biden administration has unveiled plans for solar energy to supply nearly half of the country’s electricity by 2050, which is part of its broader goal to achieve an emissions-free grid by 2035 and a zero-carbon energy system by mid-century.
“The attempt to impose retroactive tariffs on U.S. companies would harm current progress and once again cede ground to China and other nations,” American Clean Power Association CEO Jason Grumet said in a statement.
— CNBC’s Pippa Stevens and Reuters contributed to this report.