The NPR Politics Podcast - Federal Inquiry Cast A Shadow On Solar Power Growth. Now, Biden's Granted A Reprieve.

Episode Date: June 6, 2022

The Commerce Department is investigating whether China is skirting U.S. tariffs by routing solar panel parts through southeast Asian manufacturers — the biggest U.S. solar panel suppliers.That scared U.S. solar panel installers, who were worried the Commerce Department would impose retroactive fees on projects built during the investigation. Forecasts for new solar energy fell by almost half.On Monday, President Biden intervened by granting a two-year hiatus on the tariffs and invoking the Defense Production Act to spur domestic manufacturing of climate-friendly technologies including solar components.This episode: White House correspondent Asma Khalid, White House correspondent Scott Detrow, and national political correspondent Mara Liasson.Support the show and unlock sponsor-free listening with a subscription to The NPR Politics Podcast Plus. Learn more at plus.npr.org/politics Connect:Email the show at [e-mail] the NPR Politics Podcast Facebook Group.Subscribe to the NPR Politics Newsletter.Find and support your local public radio station.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

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Hey there, it's the NPR Politics Podcast. I'm Asma Khalid. I cover the White House. I'm Scott Detrow. I cover the White House too. And I'm Mara Liason, national political correspondent. President Biden promised to cut greenhouse gas emissions from 2005 levels in half by 2030. That is less than eight years away. But that goal hit a big speed bump when the Commerce Department began investigating whether solar panel manufacturers in Southeast Asia were evading U.S. tariffs on China. The manufacturers in Cambodia, Malaysia, Thailand and Vietnam, who make most of the solar panels installed in the United States, get a lot of parts from China. The investigation put a lot of major projects all across the U.S. on hold, but solar industry did get some sunny news. You all see what I did there from the White House today? The president is granting them a two-year reprieve from the trade duties, regardless of what happens with that Commerce Department investigation. And Scott, I want to begin with

you because I know that you are covering this story today. It feels like this news could really shake up the industry. Yeah, this investigation had really put a halt on the solar industry. You talked about those four countries supplying a lot of the imports of solar. We're talking about 80 percent of all solar imports into the U.S. coming from these places. And a lot of big projects were just put on pause because there was so much uncertainty. This could be really expensive. A lot of U.S. solar companies were worried that the tariffs would be applied retroactively, meaning all of a sudden projects would be a lot more expensive. So things really, really slowed down.

And, of course, that was really bad news for the Biden administration because they have put such a priority on really expanding clean energy. And the solar market had been expanding pretty fast, but nowhere near fast enough as would be needed to meet these really ambitious goals of that end of decade goal, but also Biden's goal that by 2035, having a net carbon neutral power sector, which would mean a ton more clean energy than we have right now. Does this mean that in effect, the tariffs on China are lifted? Well, Mara, great question. Answer. You didn't tell me to ask you that. It's a great question. It's tricky and complicated. And the Biden administration had really been backed into a corner here, right? Because they have these ambitious solar goals. This investigation really hurt the solar industry,

but the Biden administration felt like its hands were tied. That's something you heard from the administration, from the Commerce Department over and over again, saying that they felt like there was no legal recourse to stop this investigation. And of course, Mara, you know that going in, President Biden was so worried about restoring the norms that the Trump administration had broken when it comes to outside political influence. But in this case, they felt like they simply did not have any legal power to stop this investigation. So what happened here was a loophole. The investigation is continuing. It could ultimately result in these tariffs being applied. But for the meantime, there is a two-year period where there would not be tariffs. There would not be these penalties. And that

gives some certainty for projects to go forward and not have to worry about will the costs suddenly rapidly expand. So, Scott, I just want you to clarify again for us. You know, we're talking here about Southeast Asian countries, and yet we're also talking about Chinese tariffs. Help us connect those dots. Yeah, it's a little complicated, as you know, which is why I usually leave all the tariffs coverage to you and not to me. But the basic concern that the investigation is looking into is that Chinese tariffs should apply to a lot of the products coming out of these countries at all. The concern is that Chinese companies are effectively routing their solar equipment, their solar panels through these

other countries to avoid tariffs. So that's the heart of what the investigation is looking into. But just on a big picture level, what we've got here is a clash of two priorities. One, Biden wants to increase the production and importation of solar panels because of his climate goals. But on the other hand, he inherited a regime from the Trump administration that wanted to punish China for violating trade rules. And on the other other hand, he wants to expand American production.

He wants to make clean energy synonymous with good union jobs. But the market right now, the global market right now, is that a lot of these solar panels come from Asia. And if you need to very quickly scale up the amount of solar panels in the country, you need to import solar panels right now. And that's where the second half of today's news comes in. As we all know, the big tax breaks in

front of Congress for clean energy continue to be stalled because Build Back Better stalled. There's conversations about is there some sort of narrow ordeal happening with Manchin and Schumer right now? We've talked about that before. We'll talk about that again. And I'll just say, in the meantime, as they wait, Biden announced today that he will yet again invoke the Defense Production Act and also pledge the federal government to buy more domestic solar panels, solar panel equipment, in a way to try and jumpstart and spur the domestic solar power industry. Scott, is there anything else you think we ought to know about this announcement today?

Yeah, it's the broadness of what the Defense Production Act is going to touch when it comes to clean energy. It's not just solar panel manufacturing. It's other things like insulation, heat pumps for buildings. That's something we've heard a lot about over the last few months, especially power grid infrastructure. This is something that climate advocates feel like is long overdue. They've said all along, if climate change is the emergency that Biden talks about it being, and that frankly, reality shows it is right now. The federal government needs to act more like it's an emergency. And invoking the Defense Production Act is one way to do that.

All right. I want to talk a lot more actually about the Defense Production Act, but we are going to take a quick break first and we'll be back in a moment. And we're back. And Mara, I want you to talk to us about the Defense Production Act, because this is a law that was passed during the Korean War, presumably for defense purposes. And it feels like all of a sudden we're talking about it a whole lot more for things that, you know, on the surface don't really seem all that related to defense purposes? Well, maybe not in the classic sense, the military sense, but the Defense Production Act is supposed to allow the president to either get around bottlenecks or to get things manufactured fast when we can't import them. It was used for vaccine production. Now it's being used for solar panels. It's one of those things that presidents can do on their own without waiting for Congress. It's like an

executive order. I hear what you're saying, Mara, but I do think to, you know, to a lay person, to myself even, the idea that the Defense Production Act, which I think of as being used for military purposes, is being used to produce more baby formula, to bring in more baby formula, because there are mothers who cannot feed their children right now. It does feel like there's this stretchiness to the Defense Production Act or this expansion of what it ought to be used for. Yeah, well, I actually think it's being used for exactly what it's supposed to be used, which is something that's an emergency. People need baby formula and the president can invoke this act to get it happening right away. He can order a factory to start making something when maybe that company wasn't ready to do it.

I think the bigger question that it raises is just about executive power in general, executive orders in general. When Congress is gridlocked and the president can't get Congress to pass legislation, he relies on executive orders, which are temporary and only last as long as his term does. That, I think, exposes a much bigger problem in our system about why we have so much paralysis and gridlock. But the Defense Production Act is used for short-term shortages and emergencies just like now. Is President Biden using it akin to previous presidents, or do you see any sort of expansion of it now? I mean, I feel like it's fair to say that a lot of the emergencies that these various Defense Production Act invocations are addressing are unprecedented, though, right? Like, let's just talk about the solar panels. And today, we are seeing more and more severe weather that is clear is not going away anytime soon. We are seeing more and more political instability caused by, you know by root climate change issues. I mean, I feel like it's fair to say that is a big crisis that the federal government could more aggressively address.

There's no doubt about this. And you could argue that using the Defense Production Act to increase the number of solar panels is a pretty weak response to the fact that Congress seems to be unwilling to do anything about climate change on a broader level. There's no doubt about that. The paralysis in Congress about what to do about global warming and extreme weather leaves President Biden with not a whole lot that he can do on his own except for things like this, invoke the Defense Production Act to get some more solar panels. You know, Mara, I do think it's worth pointing out, though, that the Defense Production Act, at least in this case here with solar panels, is being used by the president to get at one of his own policy priorities, climate in this case. And there's really no other option for him. I mean, there's no congressional buy-in to really do a whole lot more.

No, because our system is set up that you need a super majority to do anything. It's almost as if we have the worst aspects of the parliamentary system and none of the benefits. In other words, in a parliamentary system, the party that gets all three branches of government gets a chance to enact its agenda, and then the voters get to decide whether they like that or not. But in America, we don't do it that way. We have minoritarian institutions like the Senate, and it produces gridlocks. So voters vote for a party and their agenda, but they never get to see that agenda enacted. And then they get frustrated, and then they throw out that party, and they do it again. Why do you think we have so many change elections in America?

Change elections meaning the voters change party control of one or both houses of Congress or the White House? Because Congress and the president can't seem to ever get anything done. I think that's definitely true big picture. I would just add that when it comes specifically to Biden's climate agenda, it's been an issue of getting 50 votes, not a super majority this year. And that's why we are in June 2022 monitoring how talks are going with Joe Manchin, just like we were in February 2021. All right. Let's leave it there for today. A quick reminder, our survey, if you all did not do it at the beginning of the show, is at npr.org slash podcast survey. Please go take it. I'm Asma

Khalid. I cover the White House. I'm Asma Khalid. I cover the White House. I'm Scott Detrow. I also cover the White House. And I'm Mara Liason, national political correspondent. And thank you all, as always, for listening to the NPR Politics Podcast.