On August 16, a group of solar manufacturers called the American Solar Manufacturers Against Chinese Circumvention (A-SMACC) filed anti-circumvention petitions related to AD/CVD orders that had been imposed in December 2012 on photovoltaic cells from China. The petitions relate to imports from Malaysia, Thailand, and Viet Nam, and allege that Chinese producers shifted production to these countries for subsequent export to the United States in order to circumvent the AD/CVD duties.
The arguments in the various petitions are similar. We use the petition related to the AD/CVD order against Thailand (with exhibits removed in order to reduce file size) to illustrate the allegations.
The core of the petitioner's argument in the case of Thailand is that "Chinese producers are diverting Chinese-origin components through Thailand to undergo minor processing to complete CSPV [crystalline silicon photovoltaic] cells and modules subject to the Orders and subsequently to export the merchandise to the United States to avoid AD/CVD duties." Specifically, "certain companies are completing the production of CSPV cells in Thailand using wafers manufactured in China from Chinese polysilicon with additional Chinese-origin components and then exporting the cells to the United States or assembling such cells into modules with additional Chinese-origin components before exporting to the United States." The petition further explains the claim as follows:
Following the imposition of AD/CVD duties on Chinese-origin solar cells, Chinese integrated producers started building cell and module assembly plants across Southeast Asia, while continuing to rely heavily on Chinese labor, raw materials, and inputs. Chinese producers have developed a circumvention scheme that involves moving the end of the production process for CSPV products, which entails only minor processing, to a third country for the express purpose of avoiding AD/CVD duties, while at the same time retaining as much of the subsidized supply chain and labor as possible in China.
The petition offers the following statistics on U.S. photovoltaic cell and module trade with China and Thailand in support of this claim:
Since the imposition of the Orders, U.S. imports of CSPV cells and modules from China have declined significantly. For instance, from 2011, the year the petitions were filed in the underlying investigations, to 2020, the value of Chinese imports decreased 86 percent, from $2.8 billion to $392 million. The sharp decline has continued into 2021, with less than $7.5 million of imports from China from January through May of this year. At the same time, U.S. imports of CSPV cells and modules from Thailand have surged. In 2011, the United States imported a mere $336,806 of CSPV cells and modules from Thailand. Since then, imports from Thailand have significantly increased to over $1.4 billion in 2020. This trend has continued into 2021, with more than $532 million of imports in just the first five months of the year. Notably, in ten years, Thai import value share of CSPV cells and modules went from a .01 percent value share of total U.S. imports in 2010 to nearly 20 percent in the first five months of 2021. ...
On this basis, the petition asks that the Commerce Department "initiate an anti-circumvention inquiry on imports of CSPV cells and modules from Thailand that are produced and/or exported by the companies subject to this request and simultaneously issue an affirmative preliminary circumvention determination as soon as possible to provide the domestic industry with the relief to which it is entitled to under these Orders."
The Commerce Department now has 45 days from the date of filing to make a final ruling or initiate an investigation.