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President Biden waives tariffs on solar panels for two years

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Yahoo Finance Live anchors discuss President Biden's tariff waiver on solar panels for the next two years and his push towards clean energy manufacturing in the U.S.

Video Transcript

AKIKO FUJITA: Let's take a look at some solar stocks as well, as we're checking the markets earlier. We've seen a big pop on that front, as the Biden administration waives tariffs on solar imports for two years. Now we're talking specifically about new tariffs for these imports that come in through four Southeast Asian countries. So we're talking about Malaysia, Vietnam, Cambodia, as well as Thailand.

Now, the backstory here, I think, is a really important one to know. These tariffs have been in place since 2012. So the tariffs aren't necessarily new, but there's been an investigation by the Commerce Department looking at specifically whether Chinese manufacturers of these solar panels have been trying to circumvent the tariffs by rerouting them through the Southeast Asian countries.

Now, that Commerce Department investigation, some have argued, has really, essentially, brought solar panel production to a halt in the US. Now, there's a bit of a divide in the industry right now, those between the developers, who are saying, look, this kind of puts us in a bind. We need to know where exactly the tariffs are going to be, so we can plan ahead. And then those manufacturers, who say, this reliance on China is just too much. There needs to be a focus on manufacturing in the US.

And what we've heard from the White House today is that, in fact, the president is going to invoke the Defense Production Act to manufacture more of these solar parts panels in the US, so, in a way, trying to appease both sides. But this comes at a time when the administration is really trying to accelerate that transition to renewables. And there's been a lot of companies, even Governor Newsom out in California, who've said, look, there's got to be some clarity provided here because everybody's just waiting to find out what this investigation is going to yield.

BRIAN CHEUNG: And, you know, you and I were talking about this morning, it's very confusing, all the moving parts here. And we have to be clear that any announcement that we got on the Defense Production Act from the Biden administration is separate from any Commerce Department investigation into whether or not Chinese companies are, indeed, circumventing by just turning some of their supply chains via the Southeast Asian countries in question here.

Now, what we need to know is that the actual announcement from the White House this morning, which is now official, is that Cambodia, Malaysia, Thailand, Vietnam will no longer have to face those duties for 24 months. And it's really for that overarching purpose, which you just described, which is to try to get over that slowing that we've seen in US domestic production because of the uncertainty over the tariff and other types of policy decisions from the White House. Hopefully, that gets them to perhaps get a little bit more aggressive because we have seen, actually, a slowing of about 6.8% in terms of solar development here domestically.

AKIKO FUJITA: Well, and it's important to know, if we're talking about China, they control about 80% of the global supply.

BRIAN CHEUNG: That's why this is so important.

AKIKO FUJITA: And that's significant. You just saw the chart there, why Southeast Asian countries have really come to become the key importers for the US as well. So, a story we're going to continue to watch.