Domestically manufactured solar racking and mounts may experience a boon thanks to recently enacted trade duties on a range of aluminum products imported from countries around the world.
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The U.S. Dept. of Commerce in October placed antidumping and countervailing duties (AD/CVD) on aluminum extrusions imported from 14 countries. After nearly 13 months of review, these trade duties cover a list of aluminum extruded products from China, Colombia, Ecuador, India, Indonesia, Italy, Malaysia, Mexico, South Korea, Taiwan, Thailand, Turkey, the United Arab Emirates and Vietnam.
“In all of these [AD/CVD] cases, typically what you see is a surge of subject imports from the countries that are at issue — so, the 14 countries here — where they’re taking market share from the U.S. producers, and they’re priced much lower,” said Robert DeFrancesco, a partner in international trade practice at Wiley Rein LLP and counsel to this case’s filing petitioners. “They’re using dumped and subsidized pricing to gain market share in the United States.”
Among the aluminum products within the scope of these import duties are solar panel racking rails, solar tracker assemblies, electric vehicle battery trays and EV charging station parts or assemblies. Aluminum framing on imported solar modules is not affected by these trade duties.
The federal government’s look into the current state of aluminum imports followed an existing case regarding aluminum extrusion imports from China, which was initiated in 2011. This latest AD/CVD investigation started in October 2023 after a petition was filed by the U.S. Aluminum Extruders Coalition, a group representing 14 domestic aluminum extruders, and the United Steel Workers Union.
“In order to bring a case, you have to have standing, and you have to show that you represent at least 25% of the U.S. industry and 50% of anyone who expresses an opinion on it,” said Greg Husisian, partner and litigation attorney with Foley & Lardner LLP and chair of the firm’s International Trade and National Security Practice. “At the very start, there’s a requirement that it be filed on behalf of the U.S. industry producing the same product, and the orders result, generally, in fairly high duty rates.”
Depending on their country of origin, the new import duty rates on aluminum extrusions range from a few percent up to nearly 377%. The latter applies to imports from China. All 14 countries received antidumping duties, while only China, Indonesia, Mexico and the United Arab Emirates also have countervailing duties, due to their own countries’ efforts at subsidizing aluminum extrusion production costs.
AD/CVD investigations aren’t new to international trade or even the solar industry, but this aluminum extrusion case had its quirks.
An unusual case of anti-dumping
The U.S. solar market is familiar with trade duties imposed on industry-specific products, like the AD/CVD investigations into solar cells imported from Southeast Asia. However, solar cells generally have similar methods of production and are within a single product group. AD/CVD investigations typically center on a single product type.
“Aluminum extrusion” is instead a production method that covers a breadth of different industries, from door frames to solar racking, and even includes “fabrication.”
“[This] is a very odd order, a very complicated scope, because it’s based on how the product is made rather than the physical product,” Husisian said. “That’s why it covers so many different things … because it’s based on a production process to reflect the fact that you can squeeze the aluminum out into, basically, whatever form you want.”
According to final investigation filings, Commerce considers aluminum extrusions from those countries subject to these duties “regardless of form, finishing or fabrication, whether assembled with other parts or unassembled, whether coated, painted, anodized or thermally improved.” If the product is extruded using the common elements composing aluminum and comes from one of those 14 countries, then it is subject to the additional trade duties.
The exception to these duties is for aluminum extrusions that are permanently assembled with other components besides other aluminum extrusions and fasteners. That’s why aluminum frames on solar modules are not subject to the duties.
How these duties might affect the market
The purpose of initiating an AD/CVD investigation is to level the playing field within a certain market, DeFrancesco said. With these duties in effect, importers will be responsible for paying those additional costs on affected extruded aluminum reaching American ports. The party making the purchase is commonly the one paying those duties.
“You’re going to see lots of renegotiations, lots of risk management strategy,” Husisian said. “Sometimes, people will come up with arrangements like not [setting] the final price until the administrative review is finished.”
A year following enactment of AD/CVD duties, Commerce will reassess its determinations to see if the initial cash deposit rate set was sufficient. There is a chance that these duties could change, which would result in importers either being charged or refunded.
Additionally, with these import duties in place, there is the chance that aluminum extrusion supply and prices in the United States will fluctuate, Husisian said. But the initial purpose of starting this investigation was to drive business to domestic aluminum extruders — including solar racking, mounting and tracker suppliers.
“Like all these cases, it’s always a lot of work at the beginning, and it’s an awful lot of work at the very end,” DeFrancesco said. “We’re hopeful for a good outcome, and we’ll have to wait and see.”
