Biden bans solar panel material from Chinese firm over forced labor
The Biden administration on Thursday said it will block imports of a critical material for solar panels from a major Chinese company, as part of what it called a “whole-of-government” approach to combating forced labor in supply chains that run through China.
The move, coming a day after the firm and four others were placed on a trade blacklist, is the latest U.S. rebuke of China for what Washington says are widespread human rights violations affecting ethnic Uyghur Muslims, abuses that the State Department has labeled a genocide.
Customs and Border Protection will implement the prohibition on products containing silicon materials from Hoshine Silicon Industry Co. Ltd and its subsidiaries, Secretary of Homeland Security Alejandro Mayorkas said at a press conference Thursday. The company is a major manufacturer of the raw materials used in the polysilicon inside most solar panels.
The CBP action, called a “withhold release order,” allows the agency to hold shipments that include materials from Hoshine at the border, only releasing them if the importer can prove they are not made with forced labor.
“This order was issued because CBP has information reasonably indicating that Hoshine uses forced labor to produce its silicon-based products,” Mayorkas said, adding that the agency had identified restrictions to worker movement and widespread intimidation.
Hoshine has been a focus of special scrutiny amid rising international discontent over forced labor conditions in solar supply chains. The company was largely the subject of a report on Uyghur forced labor in the northwestern Xinjiang region of China, which provides about half the world's supply of polysilicon to the solar industry.
The action stops short of a regionwide ban on polysilicon and related materials from Xinjiang, which the agency has considered in recent weeks under pressure from a bipartisan group of lawmakers.
In the past, CBP has blocked imports from individual companies producing products such as cotton and tomatoes before issuing regionwide bans. But Mayorkas declined to indicate during the briefing whether CBP is preparing a Xinjiang-wide polysilicon ban, saying CBP would root out forced labor “wherever it exists.”
“We’re very mindful that we’ve seen a lot of illegal conduct in a particular region,” Mayorkas said. “That may drive our investigative efforts, but it is not geographically determined. It is determined according to the conduct of particular companies.”
The action comes a day after the Commerce Department placed Hoshine and four other companies on its “entity list,” a trade blacklist that prevents U.S. firms from doing business with the listed firms without government approval.
Those other companies are Xinjiang Daqo New Energy Co., Xinjiang East Hope Nonferrous Metals Co., Xinjiang GCL New Energy Materials Technology Co. and the Xinjiang Production and Construction Corps. All are involved in the manufacture or use of polysilicon products, XPCC was the subject to an import ban imposed by the Trump administration.
Congressional lawmakers who have pushed the Biden administration to act praised the CBP move on Thursday, but urged the agency to continue its investigations into forced labor in China.
“We are hopeful that the Biden administration will continue to take strong enforcement action against China for their human rights violations and unfair trade practices,” said Democratic Reps. Dan Kildee (Mich.), Bill Pascrell (N.J.) and Earl Blumenauer, (Ore.), who earlier this month called for a halt to imports of solar panels and other products that contain polysilicon from Xinjiang.
The Chinese government denies that forced labor conditions exist in Xinjiang, saying the camps where thousands of Uyghur Muslims toil are actually there to reduce poverty in local populations.
“The so-called genocide and forced labor in Xinjiang are nothing but rumors with ulterior motives and downright lies,” Chinese Foreign Ministry spokesperson Zhao Lijian said earlier this week when asked about a POLITICO report on the coming import restrictions. “Its real purpose is to restrict and contain the development of relevant sectors and enterprises in China.”
CBP is still calculating how much Hoshine’s materials are used in the American solar industry, but it estimates the U.S. imported at least $150 million of products containing Hoshine’s materials in the last two and a half years, alongside $6 million in direct imports from Hoshine itself.
Silicon-based products are used in a variety of products outside the solar industry, such as semiconductors common in consumer electronics. Though the extent of CBP’s enforcement of the import ban is still unclear, semiconductor makers did not expect it to affect them directly in the days leading up to the announcement, saying computer chip-grade polysilicon is not produced from Xinjiang.
Clean energy experts have warned that solar installers in the U.S. may have to raise prices for panels as the industry moves away from low-cost materials from Xinjiang. But the solar industry has been pushing its members for months to cut ties with Xinjiang-based producers, and CBP officials say they already see some evidence of a shift.
“Our initial assessment is that there has been some movement away from this particular manufacturer,” said Ana Hinojosa, head of CBP’s forced labor enforcement team. While exact numbers are not yet available, she said imports "seem to have declined somewhat in the last year.”
The Biden administration hopes that solar and other renewable energy technologies will help the U.S. eliminate carbon emissions from electricity generation by 2035. While those environmental goals "remain a priority," Mayorkas said they won't sacrifice U.S. labor laws to achieve them.
"Our environmental goals will not be achieved on the backs of human beings in a forced labor environment," he said. "We are going to root out forced labor and use alternative products that are manufactured and produced legitimately."
