ExclusiveHanwha calls off request for US Section 301 probes on China, India

Hanwha Qcells USA's factory in Dalton, Ga. / Courtesy of Hanwha Solutions Qcells Division

Hanwha Qcells USA has withdrawn its comments on proposed U.S. investigations into alleged excess manufacturing capacity in 16 economies under Section 301 of the Trade Act of 1974.

In a letter sent to U.S. Trade Representative (USTR) Jamieson Greer on Wednesday (local time), the Korean conglomerate’s U.S. subsidiary had originally requested Section 301 probes and tariffs on solar wafers, cells and modules from China, Indonesia, Cambodia, Thailand, Vietnam and India, calling them "state-influenced economies" that distort global markets with overcapacity.

The company also urged tariff relief for Korea and Malaysia, denying state-directed solar overcapacity in countries where it operates manufacturing facilities.

These requests were made in response to the Office of the USTR's inquiries about whether the company wished to provide comments specific to each of the 16 economies subject to Section 301 investigations.

"Manufacturers of state-influenced economies have relocated production to Southeast Asian countries to circumvent U.S. trade remedies, and India’s solar manufacturing capacity is nearly triple its domestic demand," Kim A-reum, the company’s head of trade policy and regulatory affairs, said in the letter, now removed from the USTR website.

"Qcells maintains that Korea and Malaysia do not have structural excess capacity in key solar inputs, and that imposing tariffs on these market economy allies would undermine U.S. solar manufacturing and the objectives of this investigation."

Given the company’s criticism of China in the letter, the withdrawal has been attributed mainly to concerns over possible retaliation from the world’s second-largest economy, which also dominates the global photovoltaic industry.

Last October, China’s Ministry of Commerce announced sanctions against Hanwha Ocean’s five U.S. affiliates after the Korean conglomerate publicly supported a U.S. government investigation into Chinese competitors and the resulting imposition of new port fees.

The sanctions were temporarily lifted for one year last November, as Greer criticized the decision and the United States signed a trade deal with China during a summit in Korea.

Hanwha may also have been concerned about potential backlash from other countries classified as state-influenced economies. Hanwha Ocean is bidding to build next-generation frigates for the Royal Thai Navy, while other affiliates operate in several of those countries.

As of Friday morning, comments from Hyundai Motor Group, Hyrobotics, the Korea International Trade Association and organizations representing Korea’s automotive, steel, machinery and equipment industries remained posted on the USTR website.

Unlike Hanwha, those companies and business associations submitted comments only on Korea, without addressing other economies facing Section 301 probes.

The Ministry of Trade, Industry and Resources took a similar approach when it submitted two separate documents refuting Washington’s claims of structural excess capacity in Korea’s manufacturing sector and failure to ban exports of goods made with forced labor.

USTR plans to begin public hearings May 5 regarding its decision last month to launch investigations into Korea and other trade partners under Section 301, which allows the U.S. to impose unlimited tariffs in retaliation against foreign practices it deems unfair or harmful to American commerce.

The Korean government views the move as a forewarned follow-up action after U.S. President Donald Trump’s so-called “reciprocal” tariffs were ruled unconstitutional.

The trade ministry said earlier that tariffs on Korean goods would likely return to 15 percent — the level agreed upon last November — once the investigations conclude. Currently, a 10 percent global tariff applies to Korean products under a new imposition following the U.S. Supreme Court ruling.