In recent years, solar panel production has become an important industry for Georgia. In fact, one of America’s key solar companies, Q Cells, supports more than 10,000 jobs in Georgia and across the United States. The company now operates two Georgia factories — including a Dalton facility that is the largest manufacturing plant of its kind in the Western Hemisphere.
These new facilities can support good jobs in Georgia. But, there’s a problem: China is currently flooding the world with solar panels. It’s part of an aggressive strategy by Beijing to dominate the global solar industry.
Credit: Handout
Credit: Handout
In response, Sens. Jon Ossoff, D-Ga., and Raphael Warnock, D-Ga., have been urging the Biden administration to increase tariffs on Chinese solar imports. And now, Ossoff has joined with other senators to introduce bipartisan legislation prohibiting Chinese solar companies from accessing more than $125 billion worth of Inflation Reduction Act tax credits. Sen. Marco Rubio, R-Fla., and U.S. Rep. Carol Miller, R-W.Va., have also introduced similar legislation.
Will these efforts come in time?
China’s solar blitz has become so serious that seven major U.S. solar manufacturers — including Q Cells — filed a trade case in April regarding China’s illegal trade practices. And in June, the U.S. Commerce Department made an initial determination that America’s manufacturers have indeed been harmed by dumped solar panels from China.
It will take time for this trade case to work its way through Washington. But in the meantime, Ossoff and others are fighting an uphill battle. Chinese-owned companies already control more than 80% of the global solar market. They can afford to lavishly fund lobbying groups — including the Solar Energy Industries Association — that favor more Chinese solar imports.
How did we get to this point? Part of the problem is that China is deliberately routing its solar products through Cambodia, Malaysia, Thailand and Vietnam to avoid U.S. tariffs. Essentially, China conducts “minor processing” work in other countries to bypass U.S. trade laws. As a result, China is pumping out a global glut of artificially underpriced solar panels so large that the International Energy Agency estimates there is now a year and a half worth of stockpiled panels in U.S. warehouses.
It didn’t help that the Biden administration issued a 2022 Solar Emergency Declaration giving China a 24-month moratorium to evade U.S. tariffs — even though the Commerce Department reported Chinese solar firms are guilty of illegal trade activity. This tariff moratorium ended up harming manufacturers such as Q Cells while propping up Chinese solar companies that survive on hefty government subsidies from Beijing.
Thankfully, President Joe Biden reversed course. He announced he’ll continue the Trump administration’s Section 301 China tariffs on solar panels and other advanced technologies.
At this point, tariffs are needed to contain China’s solar onslaught. And though some academics will criticize the tariffs, Treasury Secretary Janet Yellen has said she believes tariffs on Chinese goods won’t raise consumer prices. And National Economic Council Director Lael Brainard favors tariffs to avoid a “China Shock 2.0.”
A recent economic analysis by the Coalition for a Prosperous America documents how tariffs have strengthened the U.S. economy and “led to significant reshoring in certain industries.” Similarly, a report by the U.S. International Trade Commission found that the tariffs implemented in 2018 reduced imports from China and effectively stimulated U.S. production without impacting consumer prices.
This is what Georgia’s solar industry needs. And Congress should pay close attention since the Inflation Reduction Act passed in 2022 was specifically intended to boost domestic solar manufacturing. However, Chinese firms are already trying to access more than $125 billion in IRA funds for their own operations. It’s why Ossoff joined with Sens. Sherrod Brown, D-Ohio, Rick Scott, R-Fla., and Bill Cassidy, R-La., to block Chinese solar companies from tapping IRA funds.
Congress and the White House can help solar manufacturers in Georgia and throughout the nation play an important role in the 21st-century economy. But that will mean strong support for the trade case filed by Q Cells and others, plus a smart trade and industrial strategy to counter China and support U.S. industry. Anything less could condemn America to a solar future made in China.
Michael Stumo is chief executive of the Coalition for a Prosperous America.
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