Preliminary countervailing duties on cells, modules from Southeast Asia released

Background

US solar manufacturers, including Convalt Energy, First Solar, Meyer Burger, Mission Solar, Q-Cells, REC Silicon, and startup Swift Solar submitted petitions on April 24, 2024 to the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (USITC), requesting an anti-dumping and countervailing (AD/CVD) investigation on solar cells and modules imported from four countries in Southeast Asia: Cambodia, Malaysia, Thailand, and Vietnam.

The DOC officially initiated the AD/CVD probe on May 14, 2024. According to official documents, the anti-dumping investigation covers the period from April 2023 to March 2024 (from October 2023 to March 2024 for Vietnam), while the countervailing investigation covers January 2023 to December 2023. The scope of the investigation extends to modules using cells from these four countries but assembled outside of these regions. However, modules using cells from outside the four countries but assembled within these countries are not included. 

InfoLink expects the preliminary countervailing ruling to be announced between September and October 2024, with the preliminary anti-dumping ruling anticipated by the end of November, due to delays in the investigation timeline.
 

Preliminary countervailing ruling results

The DOC released the preliminary countervailing ruling results on Oct. 1, with the tariff rates for manufacturers from the four Southeast Asian countries as follows:

 

InfoLink’s analysis

Since module manufacturers in the four countries can avoid duties by using cells from outside of the four regions, while module capacity is sufficient in the U.S. and globally, the AD/CVD ruling will have a more significant impact on the global supply of cells. The four Southeast Asian countries have been a major source of cells to the U.S. Given that cell capacity in the U.S. has yet to ramp up at a large scale, other countries like Indonesia and Laos are not fully equipped to meet US module demand, and the AD/CVD duties imposed are relatively low this time, it is expected that the U.S. may continue importing cells from the four Southeast Asian countries to meet local demand.

It's worth noting that countervailing duties are generally lower than anti-dumping duties because the former is based on the amount of government subsidies received by local manufacturers, while the latter is calculated based on a level below normal market prices. For instance, in a 2022 investigation on anti-circumvention duties for cells and modules from the same four countries, the highest anti-dumping duty of final ruling was as high as 238.95%, while the countervailing duty was only 15.24%. Thus, the impact of anti-dumping duties could be more substantial. 

In conclusion, the full impact of the AD/CVD duties on solar exports from the four Southeast Asian countries and the US solar demand will become clearer once the preliminary anti-dumping ruling is announced in November. InfoLink will continue to monitor policy developments closely.

For solar companies interested in the US market, it is crucial to stay informed about trade policy changes, such as AD/CVD investigations. Companies should be agile in adjusting their overseas production layouts and consider US tariffs, policy stability, and infrastructure development to maintain a competitive edge in a rapidly changing market. To assist companies in navigating these challenges, InfoLink has released the US Market Report: PV Supply Chain Analysis and Market Prospect, providing an in-depth analysis of current market demand, policy trends, and future development directions to help businesses make optimal decisions.