June 3, 2023

President Biden on Tuesday vetoed legislation that would have reinstated tariffs on solar panels from Chinese companies in Southeast Asia found to have been imported into the United States in violation of trade rules.

The Senate narrowly passed the resolution this month, with several key Democrats backing the measure, in a sharp rebuke to Biden. The president announced a two-year pause on tariffs last year after importers complained that the sanctions would threaten wider adoption of solar energy in the United States.

“Passing this resolution is a bet against American innovation,” Biden said in a statement Tuesday. “It would undermine these efforts and create great uncertainty for U.S. companies and workers in the solar energy industry.”

It would take a two-thirds majority of lawmakers in both houses to overturn Mr Biden’s veto power.

The confrontation has pitted Mr Biden’s climate goals against efforts to make the United States less dependent on China’s supply of materials critical to the US economy. Critics said the tariff suspension failed to defend US solar workers and manufacturers, who have pushed the government to block imports of low-cost products.

“We need to support the message that we want to build a US supply chain with action – even if it is difficult and complicates some implementations,” said Robbie Diamond, the CEO of SAFE, a group that advocates for reducing US dependence on oil. “If we’re going to talk, we have to walk.”

Members of Congress focused on Biden’s suspension of sentences after a US trade court ruled in December that four Chinese companies illegally attempted to evade US tariffs on solar energy products shipped from China by shipping their products through Southeast factories to run Asia.

Had Mr. Biden not stopped tariffs, those companies would have been subject to higher import duties to bring products into the United States. Some Democrats joined Republicans in accusing the government of violating US trade rules designed to protect US manufacturers.

Michigan Democrat Representative Dan Kildee said in a statement Tuesday that Biden had failed to “hold China accountable.”

“Failure to stand up to those who engage in unfair trade practices harms American workers and manufacturers,” Kildee said.

However, the government has argued that buying solar panels from China in the short term is necessary to deliver on the president’s efforts to combat climate change. China makes the vast majority of cells and panels that convert sunlight into electricity.

However, solar energy importers and installers have defended the tariff break, saying it should be extended even longer. The White House has also argued that the materials are needed as companies commit to building solar panels after Mr Biden passed the Inflation Reduction Act, which gives companies $37 billion in incentives to produce solar panels, wind turbines, batteries and crucial minerals in the United States.

“This action reaffirms the government’s commitment to business security in the clean energy sector, and a signal to companies to continue creating jobs, building domestic productive capacity and investing in American communities,” Abigail Ross Hopper, the president of the Solar Energy Industries Association, said in a statement.

Anne Swanson reporting contributed.