U.S. House of Representatives voted 221-202 (not voting: 12) on April 28 to repeal a two-year suspension of tariffs on solar cells and modules from four Southeast Asian countries, Cambodia, Malaysia, Thailand, and Vietnam, with a 51% approval, under the Congressional Review Act (CRA). The suspension was previously waived in June 2022.
On May 3, U.S. Senate voted 56-41 (not voting: 3) to pass the proposal with 56% of approval. President Biden will make the final decision.
President Biden is very likely to veto the legislation. The House can override a presidential veto with a two-thirds majority vote, which is difficult to achieve. The current vote count in the Senate and the House shows a roughly even split, leaving room for future changes.
Based on the preliminary determination of anti-circumvention investigation on the four countries, the cash deposit rate is the company-specific AD/CVD rate of the exporter. If the exporter does not have a company-specific cash deposit rate, the cash deposit rate will be the company-specific rate. If neither the exporter nor the wafer supplier has a company-specific rate, the cash deposit rate will be the China-wide anti-dumping rate (238.95%) and the All-others countervailing duties rate (15.24%).
Manufacturers can still meet the requirements outlined in the preliminary determination by using wafers from Southeast Asia to manufacture cells and modules to avoid circumvention. Module makers with no wafer production capacity in Southeast Asia, thus using non-Xinjiang wafers, must meet the BOM requirements. Namely, their modules shall comprise at least four kinds of officially listed BOM, such as silver paste, aluminum frames, glass, backsheet, encapsulant film, and junction boxes that are not produced in China.
InfoLink maintains that the imposition of anti-circumvention duties will have little impact on Tier-1 vertical integrators with wafer production capacity in Southeast Asia. For them, the major constraint remains the UFLPA enacted last year. Meanwhile, medium- and small-scale manufacturers seek to diversify regional risks amid market volatility. The preliminary determination suggests that the U.S. will focus on BOM supply. Manufacturers are advised to be cautious about selecting and sourcing BOM.
The US Department of Commerce has announced that the final determination of the anti-circumventing investigation, originally planned for May 1, will be postponed to August 17.