US bans imports of some Chinese solar materials tied to forced labor

The Commerce Department also added Hoshine Silicon Industry (Shanshan) Co. and four other Chinese entities to a trade blacklist, a move that restricts American companies from exporting products and technology to them.

In addition, the Labor Department added Chinese polysilicon to a list of goods believed to be produced by child labor or forced labor. The list, which already contained a number of other Chinese goods, is intended to increase awareness about exploitative labor practices.

Calls to Hoshine were not answered late on Thursday in China. Xinjiang companies, including makers of polysilicon products, have repeatedly denied that the region’s labor transfer programs amount to forced labor.

Allegations of forced labor in the solar panel supply chain have created a dilemma for U.S. officials. The Biden administration wants to press China over human rights abuses, but it also wants to expand the use of clean energy sources like solar power in the United States as it seeks to reduce carbon emissions.

The administration has set a goal of generating 100% of the nation’s electricity from carbon-free sources such as solar, wind or nuclear power by 2035, up from just 40% last year. To help meet that target, it is aiming to more than double the annual pace of solar installations nationwide and cut the price of solar power by more than half.

“We’re going to root out forced labor wherever it exists,” Mayorkas said at the news conference, “and we’ll look for alternative products to achieve the environmental impacts that are a critical goal of this administration.”

Shortly before President Joe Biden took office, the Trump administration banned imports of cotton and tomato products from Xinjiang. The Biden administration had faced pressure to take action regarding products containing polysilicon produced in the region.

In a letter this month to the acting head of Customs and Border Protection, a group of House Democrats wrote that there was “overwhelming evidence of the use of forced labor in polysilicon production,” adding, “Our government cannot sit idly by.”

The actions announced on Thursday could create diplomatic and economic ripples.

China is the dominant global producer of polysilicon, a raw material that most solar panels use to absorb energy from sunlight, and Xinjiang has over the past decade risen as the country’s main production base for the material. Xinjiang makes about 45% of the world’s polysilicon, according to InfoLink, a renewable energy research company.

The import ban focuses on one company and not all polysilicon products from Xinjiang, but it could roil the market for solar panels in the United States. Hoshine and its subsidiaries supply at least some metallurgical-grade silicon to the world’s eight largest polysilicon producers, which together account for 90% of the global market, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.

Some analysts said the move on Thursday could be a prelude to further restrictions. “In our view, today’s action may only be the first step toward broader limits” on solar products from Xinjiang, Kevin Book, an analyst at ClearView Energy Partners, wrote in a research note.

The Biden administration has pursued a strategy of pressing the Chinese government on areas of contention, such as Xinjiang, while seeking to cooperate on global priorities like climate change. The ban on importing some solar energy products — important for reducing fossil fuel use — will test how far Beijing is willing to go along with that bifurcated approach, and the Chinese government may hit back through its growing arsenal of retaliatory powers.

A spokesman for China’s Ministry of Foreign Affairs, Zhao Lijian, suggested earlier this week that Beijing could retaliate against a possible ban on polysilicon imports from Xinjiang, though he did not specify what form that could take. Asked again on Thursday before the Biden administration’s actions were announced in Washington, Zhao said the United States wanted “turmoil in Xinjiang to contain China’s development.”

“The U.S. is using lies as its basis,” he said at a regular news conference in Beijing. “This act not only violates international trade rules and economic principles, it is also damaging global industry and supply chains.”