Beijing set out to destroy the American solar panel industry with subsidies that allowed Chinese companies to sell below the cost of manufacture — and, with the help of a series of neglectful American presidents, it largely succeeded. Now, thanks to Biden, products built by forced or slave labor will find their way into the United States tariff-free. (Image source: iStock)
On June 6, President Joe Biden, declaring a national emergency, granted a 24-month tariff exemption for solar cells and modules from Cambodia, Malaysia, Thailand and Vietnam.
The biggest beneficiary of Biden's move is none of those countries. It is China. The biggest victim is America.
Biden's executive order essentially suspends a Commerce Department investigation, initiated by a California maker of solar panels, into blatant Chinese tariff evasion. Biden's declaration of emergency does not formally end the investigation, but no tariffs during the 24-month period can be collected, even if Auxin Solar, the complainant, ultimately prevails.
Domestic installers of solar panels had maintained that the Commerce Department's investigation stopped them from proceeding with projects because of the possibility that Auxin would win, which would result, retroactively, in the imposition of stiff tariffs. "Across the country, solar projects are being postponed or cancelled," Biden stated in his emergency order.
"In this case, the emergency is the threat to the availability of sufficient electricity-generation capacity to meet expected customer demand," White House Press Secretary Karine Jean-Pierre said as the president issued his order.
At the same time he imposed the tariff waiver, Biden invoked the Defense Production Act to "rapidly expand" the domestic production of solar panels and equipment for grid infrastructure.
The White House maintains that it created a "24-month bridge" when domestic manufacturers can "scale up."
It is way past time to send the president to business school: his plan is unlikely to succeed. "The Biden policy gives Chinese entities two years to cement relationships with current customers and establish new ties," Washington, D.C.-based trade expert Alan Tonelson pointed out to Gatestone.
Moreover, the Biden approach requires spending far beyond what the administration now contemplates. "The Defense Production Act alone can't possibly enable domestic solar producers to compete with Chinese imports, either from China or routed through third countries, without taxpayer subsidies massive enough to offset those provided by Beijing for its own industry," said Tonelson, who blogs at RealityChek. Beijing set out to destroy the American solar panel industry with subsidies that allowed Chinese companies to sell below the cost of manufacture — and, with the help of a series of neglectful American presidents, it largely succeeded.
Biden's plan, says Tonelson, "looks like a jerry-built gimmick for placating his green and labor voting blocs rather than a serious strategy to strengthen U.S.-based solar manufacturing."
Correct. Americans workers cannot compete with slaves. Chinese solar panels are often made with what is politely termed "forced labor," Uyghurs and other captive Turkic minorities transported around China to factories resembling concentration camps.
Now, thanks to Biden, products built by forced or slave labor will find their way into the United States tariff-free. Chinese producers have been shipping China-made products into Southeast Asian countries — most notably Vietnam — and exporting them to the U.S. with labels falsely showing manufacture in those other countries.
"Vietnam cannot possible make all the products that are stamped "Made in Vietnam," onshoring advocate Jonathan Bass tells Gatestone. "It doesn't have the workers, it doesn't have the factory capacity, and its exports to the United States have grown far too fast in recent years."
In 2021, Vietnam's exports to the U.S. increased a phenomenal 28.1%. In the first four months of this year, they jumped 29.8%.
Significantly, in March, China started new train routes from the western parts of the country — areas close to the Uyghur homeland — to transport Chinese products to Vietnam.
Biden's June 6 tariff wavier, unfortunately, has two implications that go beyond clean-energy products. The first relates to the resolution of American trade disputes. The White House maintains that the president's actions reinforce "the integrity of our trade laws and processes."
Nothing could be further from the truth. As Mamun Rashid, Auxin Solar's CEO, told NBC News, Biden "has opened the door wide for Chinese-funded special interests to defeat the fair application of U.S. trade law."
Senator Sherrod Brown agrees. "If undue political influence on this case is allowed to prevail, it would lead to more risks and vulnerabilities tomorrow," he and five other legislators wrote to President Biden. In this instance, they warn, U.S. trade rules "can be undermined through aggressive political lobbying."
"We have not invested in building up American capacity the way we should, and we have not addressed China's repeated cheating," Brown stated. "On all these decisions, American solar manufacturers and their workers must be at the table." Biden, unfortunately, has taken away the seats of these domestic stakeholders.
The second implication is even more important. Biden with his tariff waiver, dog-whistled to American manufacturers to keep factories in China.
Bass, also CEO of Los Angeles-based PTM Images, explains that American companies at the beginning of this month were contemplating making investments to move supply chains from China. "Within hours of Biden's solar panel decision, they decided there was too much uncertainty about U.S. government policy to risk leaving Chinese soil," he noted. "Biden made it clear he sided with the Chinese and will not encourage supply chains in other industries to get out of China."
Biden always says he wants to support American manufacturers, but he keeps making decisions favoring Chinese workers. He did that June 6 when, with a single stroke of his pen, he devastated a U.S. industry, undermined the American legal system, and promoted slave labor in China.
Gordon G. Chang is the author of The Coming Collapse of China, a Gatestone Institute distinguished senior fellow, and a member of its Advisory Board.