A pair of US solar manufacturers challenged the Biden administration’s moratorium blocking tariffs on some panels imported from Southeast Asia through early June, opening a new risk for a sector already grappling with supply-chain obstacles.

The little-noticed challenge, filed last week in the US Court of International Trade, takes aim at President Joe Biden’s move to neutralize a trade threat that had slowed panel imports from the region. It follows the US Commerce Department’s August conclusion that some Chinese solar manufacturers have dodged 11-year-old anti-dumping and countervailing duties by assembling equipment in Cambodia, Malaysia, Thailand and Vietnam — countries that provide the bulk of the US solar supply.

Normally, most affected imports would already be facing expanded duties as a result, but Biden ordered a pause in those tariffs for two years in a bid to sustain domestic renewable power development while companies expand American solar manufacturing capacity. 

The challenge by module-maker Auxin Solar Inc. and Concept Clean Energy Inc., which makes solar structures, targets a Commerce Department regulation that blocks the collection of any new anti-dumping or countervailing duties on solar panels and cells imported from the four countries until June 6. 

The companies argue there is no legal basis for what they term an “ill-begotten tariff holiday” that effectively rewards the Chinese government “with unfettered US market access to the detriment of existing US manufacturers and new entrants” trying to build a domestic solar supply chain.

Imports of affected gear have soared under the moratorium, which poses an “existential threat,” the companies say. The tariff holiday has spurred a “lawless” cell and module marketplace that’s been fueled by “a massive and sustained wave” of cheap imports from the four nations in question using components from China, the companies argue. 

When Biden ordered the tariff moratorium in 2022, the threat of new duties had prompted some companies to halt shipments, delaying some US solar projects and suspending work on others. Biden’s move singlehandedly revived panel imports from Southeast Asia. That safety net could be yanked away if Auxin and Concept Clean Energy prevail in their case. 

The new legal threat could immediately discourage some manufacturers from selling panels to the US — and some developers from buying panels from Southeast Asia. Higher costs and shipment delays, in turn, could drive up the costs of solar power, blunting its competitiveness against other fuels, including natural gas.