Units of BYD, Longi, Canadian Solar, Trina Solar and New East Solar were found in violation of trade laws and now face heavy tariffs. Three major suppliers were found to not be in violation.

The U.S. Department of Commerce has ruled that business units of BYD, Longi Green Energy, Canadian Solar, Trina Solar and New East Solar are in violation of anti-dumping and countervailing duties (AD/CVD) laws.

The five companies were found to be moving tariff-dodging Chinese solar goods through Vietnam, Malaysia, Thailand, and Cambodia, which are responsible for as much as 80% of the U.S. supply of solar panels. The ruling means that these companies must pay tariffs on the circumvented goods to enter the U.S. market.

Past records of solar AD/CVD tariffs have shown that the fee can be as high as 50% to 250% of the cost of shipped goods. However, the tariffs will not apply until June 2024, when President Biden’s two-year pause lifts.

The looming threat of tariffs led to a freeze in the utility-scale solar industry in 2022, pulling back by deployments by about 16% on a year that was expected to bring booming growth. Biden’s pause was meant as a bridge as panel makers ramp up production on U.S. shores and international suppliers improve the traceability of their supply chains. 

Notably, major panel suppliers Hanwha, Jinko and Boviet were found to not be in violation of AD/CVD laws.

The AD/CVD saga began when a small California-based solar manufacturer Auxin Solar filed a petition in 2021.

“When prices of finished panels from Southeast Asia come in below our bill of materials cost, American manufacturers cannot compete,” Mamun Rashid, chief executive officer, Auxin Solar told CNN. “If foreign producers are circumventing U.S. law and causing harm to U.S. producers like Auxin Solar, it needs to be addressed.”

The U.S. enforced anti-dumping duties on Chinese-made solar components for a decade after a Commerce investigation found Chinese companies were receiving large government subsidies that kept their prices artificially low. The five companies found in violation and others will face the same tariff duty rates the U.S. currently assesses on Chinese-made products.

“Trina has created thousands of American jobs, billions of dollars in U.S. investment and clean energy for millions of Americans by providing competitively priced solar panels that are ethically sourced,” said Steven Zhu, president of Trina Solar U.S.

“We take issue with the Commerce Department’s circumvention finding. The work we are doing in Thailand and Vietnam is not minor or insignificant and this decision conflicts directly with its decision in the original case that cell production is the most significant production step,” said Zhu.