The U.S. Department of Commerce released a preliminary investigation on December 2. It showed that four Chinese solar equipment manufacturers evaded U.S. tariffs.
In its statement, the commerce department said it examined a complaint alleging that eight companies have avoided tariffs by assembling solar cells and modules from China in Southeast Asia for export to the U.S.
They conducted a full investigation into the Chinese companies across four Southeast Asia countries, including Cambodia, Malaysia, Thailand, and Vietnam.
The preliminary result found that four companies have attempted to bypass U.S. duties by doing minor processing in one of the Southeast Asian countries before shipping to the U.S.
The U.S. department said this behavior attempts to evade the existing anti-dumping and countervailing duty on solar cells and modules from China.
The four primary Chinese solar cell and module makers trying to circumvent U.S. tariffs are BYD Hong Kong, Trina Solar, Vina Solar, and Canadian Solar.
According to the department, circumvention of these duties threatens to undermine American industries, workers, and businesses.
The department said the preliminary determination underscores its commitment to holding China accountable for its trade-distorting actions, which undermine American industries.
The preliminary findings result from a long-running probe into China’s dominance over the solar industry’s supply chain.
The Commerce Department said it would continue to conduct in-person audits in the coming months to verify the information from the preliminary findings.
The final ruling will be released in May.
The findings mean exports from Southeast Asian countries will be subject to import tariffs.
According to Financial Times, California-based panel manufacturer Auxin Solar brought the case. It argued that Chinese suppliers were guilty of pervasive backdoor dumping, hurting U.S. manufacturers.
Auxin chief executive Mamun Rashid said the U.S. probe had largely validated its allegations of Chinese cheating.
Michael Stumo, chief executive of Coalition for a Prosperous America, called for the Biden administration to impose the tariffs immediately.
He said that it is unconscionable that the White House wants to continue to give Chinese manufacturers a pass for illegally violating U.S. trade law.