The U.S. Department of Commerce has found that certain Chinese solar manufacturers have been evading antidumping duty (AD) and countervailing duty (CVD) regulations by assembling solar cells and modules within Southeast Asia. These products are subsequently shipped to the United States.

In its final findings, the investigation revealed that some solar cells and modules exported from Cambodia, Thailand, Malaysia, and Vietnam incorporated wafers that originated in China, contravening U.S. tariffs.

The inquiry identified several companies involved in the circumvention of tariffs. Among them are BYD Hong Kong (Cambodia), New East Solar (Cambodia), Canadian Solar (Thailand), Trina Solar (Vietnam), and Vina Solar (Vietnam).

BYD Hong Kong, Canadian Solar, Trina Solar, and Vina Solar had previously been found to be circumventing tariffs in December last year.

The final decisions will not immediately impact trade at the border. According to the Presidential Proclamation issued on June 6, 2022, solar module and cell imports from the countries above will not be subject to duties until June 2024, provided that these imports are utilized in the U.S. market within six months following the termination of the proclamation.

This allows U.S. solar importers ample time to adjust their supply chains and ensure their sourcing practices align with U.S. trade regulations.

The Department has clarified that these findings do not ban imports from these South East Asian countries. Companies will have the opportunity to affirm through certification that they are adhering to duties and not circumventing them; this would exempt them from the circumvention rulings.

The Department establishes that a company is deemed to have evaded tariffs when it utilizes Chinese wafers and at least two of the following materials: silver paste, aluminum frames, glass, backsheets, ethylene vinyl acetate sheets, and junction boxes.

In cases where a company does not possess an existing tariff rate, it will be subject to an AD rate of 238.95% and a CVD rate of 15.24%. If a company previously held a tariff rate from a preceding order, that specific rate will be applicable. However, in instances where the company does not possess a tariff rate, it will adopt the tariff rate of the company from which it sources Chinese materials.

If these scenarios do not apply, the company will be subjected to an antidumping duty rate of 238.95% and a countervailing duty rate of 15.24%.

As the Commerce Department initially determined that circumvention was taking place across all four Southeast Asian countries, the agency is issuing a comprehensive country-wide designation for circumvention. This designation implies that these countries are identified collectively as channels through which solar cells and modules are evading duties on their route from China.

Under U.S. law, the Commerce Department can initiate circumvention inquiries where evidence indicates that goods subjected to existing AD or CVD orders are either completed or assembled in third countries using components imported from the country subject to the order. The imposition of tariff orders is intended to provide relief to domestic industries within the United States when confronted with inequitable competition.