Yellen arrived in Guangzhou, the first stop of her China visit, on the 4th and began a six-day trip. She is the first Biden administration official to visit China this year. One of the main topics of this visit to China is to put pressure on China to change its policies regarding the so-called "overcapacity problem" in China's new energy industry.

Yellen said that the Biden administration "pays great attention to the flexibility of the supply chain" and that trade and investment with China "need to be conducted in a fair environment."

When asked whether the United States would erect trade barriers to deal with excess capacity in China's clean energy manufacturing industry, she said, "We are trying to cultivate an industry in areas such as solar cells, electric batteries, and electric vehicles. In fact, we believe that in In these areas, China's large-scale investment is leading to some overcapacity.

We are providing tax subsidies for some of these industries, and I don't want to rule out other possible ways in which we can protect these industries. "

The Inflation Reduction Act (IRA) contains important tax breaks for renewable energy manufacturing, especially the solar photovoltaic industry, and some large companies, including JA Solar, Canadian Solar, and Hanwha Qcells, have announced production in the United States. plan.

The U.S. Department of the Treasury clarified the Section 45X Manufacturing Credit in December. Due to the business support provided to the clean energy manufacturing industry, the Section 45X Manufacturing Credit has been praised by the country’s photovoltaic manufacturers.

However, like most other countries around the world, most solar modules (especially cells) coming into the United States come from China or Chinese companies.

Not only that, in March this year, the U.S. Department of Commerce made an overall revision of the AD/CVD tax, which may expand the scope of AD/CVD tax to other countries outside China, such as countries under the "One Belt, One Road" initiative.

"In addition to the United States, many countries, including Mexico, Europe, and Japan, are feeling the pressure brought by China's large-scale investment in these industries. Last week, the European Commission announced an investigation into two Chinese consortiums, one of which whose members are solar manufacturing giant Longi Green Energy, the reason is that the two consortiums are suspected of violating the EU’s Foreign Subsidies Regulation when bidding for solar projects in Romania.”

Yellen did not say what further regulations or tariffs might look like. The United States has imposed anti-dumping and countervailing duties (AD/CVD) on several Chinese industries, including solar energy. AD/CVD solar import tariffs are currently under a two-year presidential executive exemption that is set to expire this summer.

Regarding the European Commission's investigation last week, relevant Chinese parties responded by requesting the World Trade Organization to investigate the IRA for "discrimination against goods originating in China."

Laws that favor domestic goods "risk undermining international cooperation in reducing and mitigating the effects of climate change," the statement said. This application is not yet closed.

Under the guise of "low carbon and environmental protection," the United States' "Inflation Reduction Act" formulates discriminatory subsidy policies for the new energy vehicles and photovoltaic industries, completely excluding products from WTO members including China.

From IRA to bifacial module tariff exemption

Discussions and rhetoric surrounding the U.S.-China solar supply chain have always been active, but have been somewhat muted recently.

Last month, Mark Widmar, CEO of cadmium telluride thin-film solar maker First Solar, the largest U.S. solar module producer, said the IRS needed "appropriate trade enforcement" to get U.S. solar manufacturing back on its feet. .

That's because what Widmar calls "companies controlled, owned, or subject to the jurisdiction of the Chinese government" are able to set up factories in the United States and benefit from IRA tax breaks.

Recently, two U.S. senators from Georgia issued a joint statement urging the president to remove tariff exemptions for bifacial solar modules, allowing them unimpeded entry into the United States.The two senators said in a letter to President Biden that bifacial modules currently account for about 90% of the modules imported into the United States. Hanwha Qcells, a Korean-owned enterprise, has invested approximately US$2.5 billion in building a vertically integrated solar energy production base in Georgia.

The Solar Energy Manufacturers Alliance (SEMA) also issued a statement in March, calling for increased support for the domestic solar manufacturing industry in the United States, especially in the upstream silicon ingot and wafer production areas where it believes there is a "clear gap." SEMA said, "The government's failure to protect this industry has contributed to overdependence on China."

SEMA is a business alliance group composed of non-Chinese manufacturers operating in the United States, such as First Solar, Meyer Burger and Silfab.trina solar panels