U.S. crackdown on Chinese forced labor hits solar industry
U.S. Customs and Border Protection officials have seized $806 million worth of imports since a forced labor law aimed at Chinese manufacturers went into effect last June, Axios has learned.
Why it matters: Intended to punish China for its treatment of Uyghurs and other minorities across Xinjiang province, the crackdown has had the corresponding effect of crippling the U.S. solar market and freezing its supply chain.
By the numbers: Axios reported that the U.S. detained 1,592 imports into the country worth nearly $500 million through Sept. 30 because the shipments violated the Uyghur Forced Labor Prevention Act — known as the UFLPA.
- Customs officials have since confirmed to Axios that they have seized an additional $306 million worth of goods from October through early January of this year.
- The majority of the detained imports were solar panels, a critical piece of solar infrastructure that mostly comes from Xinjiang and other parts of China.
Zoom in: The law has brought the flow of solar imports into the U.S. to a near standstill, and ground large-scale projects to a halt.
- The shrunken supply has jacked up costs and forced developers to retreat.
- "I have seen developers and investors revising solar module costs up by 30%-40%," Xu Chen, a senior director at FTI Consulting, tells Axios.
Between the lines: The seizures over the past few months comes as Customs and Border Protection is becoming more familiar with the products that violate the law, one official told Axios. The increase also stems from Q4 being a historically busy time for solar shipments.
- But the official added that he expects the number of seizures to drop relatively soon, as the industry begins to figure out what it can ship, and what violates the law.
- "As more importers learn more about the UFLPA, we should be able to see a drop in the numbers," said the official, who did not want to be named because he was not authorized to speak on the record.
Alan Neuhauser co-authors the Axios Pro Climate deals newsletter. Sign up now.
Editor’s note: This story has been updated with corrected figures from U.S. Customs and Border Protection. The worth of imports the agency has seized since last June is $806 million (not $1.3 billion), and the amount seized from October through January is $306 million (not $806 million).