WEBVTT
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The film in your pocket and the solar panel on your neighbor's roof started the same way.
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As quartz refined into great powder called polysilicon, 99.999% pure.
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And roughly 93% of the world's supply of that powder now comes from China.
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Nearly half of the solar grade material comes from a single region, Xinjiang, where Washington says production runs on forced labor.
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Two of the technologies that will define this century pass through one gate, and Beijing is the gatekeeper.
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And this month, for the first time, America decided to push back on the gate itself.
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So welcome to the big three from the Coalition for a Prosperous America, where each week we break down the three biggest stories shaping U.S.
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trade, industrial policy, and the American economy.
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I'm here to Sikar, and this week I'm joined by Nick Ayakovella, CPA's Executive Vice President for Public Affairs and Communications, as Andrew is out this week.
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So let's get to it.
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So the big story this week is the administration has rolled on its uh Section 232 investigation into polysilicon.
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And the remedy goes further than any solar trade action before it.
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So we have a 15% national security tariff plus minimum import prices, a first for any 232 covering the whole supply chain from raw polysilicon to finished modules, and it lands on December 4th.
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Polysilicon is the material underneath every silicon chip and virtually every solar panel, and China has spent 15 years cornering the market.
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And today, what Washington did, how China built that corner, and whether this action can bring the industry home is what we'll be discussing.
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So our guest today has litigated this issue for over a decade.
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Tom Baleen is a partner at Cassidy Levy Kent and has represented American solar manufacturers in most of the major trade cases of that period, including the circumvention case and the court fight fight that ended the two-year tariff holiday that they were receiving.
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Last time Tom was on, we talked about Chinese solar firms angling for 45X tax credits through Hong Kong corporate structures, but now the fight is on the raw material itself.
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Tom, welcome back.
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Thanks for having me.
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First, why don't we start by talking about what Washington just did?
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So there's a lot of layers to this proclamation.
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There's the terrorists, the price floors, et cetera.
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Talk us through, you know, what you think, your some initial thoughts about this proclamation, why you think this is unique.
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Well, so you you said right away right up with that, that this is a first uh in a long time that we've seen something where um something like a minimum import pricing uh mechanism has been used.
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Uh in uh the trade world, it's not uh out of left field.
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It's actually been used in other contexts.
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But uh, as you know, we've talked about anti-dumping and countervailing duties in the past uh on this pod, and and I've explained how those those things work.
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And sometimes you can get what's called a suspension agreement in those cases where you can set a minimum import price.
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So the United States has used these to try to resolve trade frictions in the past.
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And so it's it's a it's a nice to have in a space, but it's not exactly, you know, uh a new wheel.
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It's reinventing the wheel.
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Uh the where it's done uh something new here that is different than in any other case is that it's looked at the entire supply chain and tried to really establish um uh what you would have as a differential within each step of the supply chain.
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And I think it's it's doing so in order to provide some certainty for people to come back to the United States, invest in making these products here, knowing that you're not going to have a situation where you put a business plan together assuming that the price in the market is going to stay at a certain level, only to have a surge of Chinese imports come in and crash those prices down, right?
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So, what the minimum import price does throughout the supply chain is basically provide some certainty for investment in the US, where you can actually build out a business case to invest in something that may not become operational in the next quarter, but eight quarters from now.
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So that's why it's it's particularly unique because of the expansive nature.
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Yeah, it seemed like you know the the imposition of the the price, the min the minimum import price that you know it does things that a straight tariff can't do.
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So maybe Tabia, you might have already kind of touched on this a little bit, but I think that that was a really kind of for me a signature takeaway of this proclamation.
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And maybe if you want to elaborate on that a little bit, the import of that.
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Yeah, for sure.
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So what what they're there's a couple of things that are going on here.
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So um, you know, with our special tariffs that we've had under AIPA, Section 232, Section 301, sometimes what they do is they actually incentivize a tariff cost sharing as between a foreign producer and the US importer, where, you know, I mean you're you and I have talked about this in the past, where, you know, in the initial China 301, you know, in Trump 1.0, what you saw was, you know, prices that were going up in in the normal course, all of a sudden we put in place Section 301 tariffs of 25%, those prices then all of a sudden drop by 25%.
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And it's clear that the Chinese were willing to take a bath to maintain U.S.
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market share and not increase prices, right?
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You can do that only for so long until it actually catches up to you.
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Um, that's sometimes what happens with these special tariffs.
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And so what we have in this circumstance is we have the tariff buffer, but we also have this minimum import price floor, which actually has some teeth to it because it basically says you have to be at a minimum import price of, let's say, on a cell, 22 cents per watt.
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Then you also have to certify that your first arm's length sale of that end product containing that cell, if it's if it's the cell itself, has to be at 22 cents a watt or higher, or the module that you're going to produce uh from that cell has to be at 38 cents per watt or higher.
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So it's basically setting in place a US market atmosphere where the expectation is on the commercial side, where people are buying these products from unrelated parties, you're going to have a market price war that basically sets that price low at that level.
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And what I think this is intending to do is, you know, everybody's trying to drive down costs.
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As you get to scale, you're going to be able to deal with cost increases because um you can deal with fixed costs on a per unit level if you get to scale, right?
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You can reduce those, you can drive them down.
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And so in an environment where you get more companies onshore here and getting scale in the US market, you're going to have a situation where US costs should be declining.
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Over the period of time, if you know that you can get your costs below what these minimum import price levels are, you have some margin built in there to compete with the imports.
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And so it does actually create a market opportunity for anybody who wants to invest because you could say, hey, if we can get our fixed costs down and we have to deal with some variable costs, of course, but if we can get our fixed costs down and get scale, we can actually be selling modules, you know, making a profit.
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You know, if we can get you know costs down to 33, 34 cents a watt, you're gonna be able to be, you know, the pole position for selling those modules in the U.S.
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market.
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And guess what?
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Not only do you have that adder, but you have the OBBA and the IRA uh tax benefits that that accrue because you've produced the good in the United States using non-fioc materials.
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And so it's it's really an opportunity that, you know, I think the Commerce Department is saying, you know, we're gonna get into this space, we're gonna create an industrial policy that actually generates onshoring activity.
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And if I can just bring it back to the baseline of the proclamation, I mean, when you look at the proclamation that the president's team put out right in the first paragraph, it identifies what this is all about, right?
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In the space of a decade and a half, and you make me feel old here because you know I was litigating these cases back, you know, when we first brought the first solar cell piece.
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I was in the government at the time in 2011, and it was a big deal as to whether we would even initiate the case because there was concern that China would immediately retaliate against our polysilicon production, which was the global supplier of polysilicon at the time.
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And what happened is they did.
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They basically put in draconian tariffs that hollowed out our polysilicon production.
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Well, polysilicon production is something well akin to um, you know, major league baseball, right?
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You want to be producing the best grade polysilicon that actually goes into the semiconductor industry.
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Every single time you're producing a batch of polysilicon, you want to hit a home run.
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Guess what?
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In baseball, if you hit 400, you're going to the hall of fame.
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And that's something somewhere that's happening with polysilicon producers.
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If you can get to 400 on the semi-grade, you know, you should be doing really well.
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You should be printing money.
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The problem is, what do you do with the other 60%?
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That 60% needs some place to go.
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Well, the 60% is actually a big deal when you think about it.
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And so having the ability to sell that here to and get uh uh and wafer making facilities that can come online now here, and then have the soul solar supply chain here to sell that 60% of the polystilicum production, that's a big deal.
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And that says the company is like the corneans, the hemlock, the vodkers of the world.
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Hey, you know, ramp up your production and continue producing polysilicum.
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I I love that you brought in baseball here because this is a perfect segue for for opportunity for me to question our our resident baseball player, Nick, um, to see if you had any questions.
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You see what I did there?
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That that was smooth, by the way.
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But Nick, did you I wanted to give you a chance to weigh in with questions or any comments you might have.
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Yeah, no, I uh I I'm I'm a washed up baseball player now who tries to play golf.
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But no, I think what Tom is saying, you know, is is really important to understand that uh the whole reason why this is such an important 232 and the framework that we've seen is it is it does encompass the entire sector.
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And when you look at poly in particular, uh you know, certainly they really tried to figure out what is the best way to accommodate this entire supply chain, acknowledging that the poly producers they can make you know chip grade poly, and that's phenomenal.
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Uh we really want a chip sector, but what do they do with this leftover piece when China has so dominated the global marketplace uh for solar grade polysilicon, not because they've outinnovated us or they're better companies.
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Um it's simply because we have allowed them to do it either through a lack of of enforcement or policy, uh and we've we've let them, you know, undercut our market and our producers.
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Uh so I think what's really smart here and and maybe uh you know, Tom, I mean you've spent over a decade, I think, you know, um, although you know he's he's still still looking, you know, very uh very you know very young.
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But but it's uh you've had you your experience in this sector uh is extensive.
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I mean, you've been in the fights with these companies on the front lines, um across multiple trade cases, you you've seen firsthand what the Chinese can do, uh how they've gotten around some of these loopholes.
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What really stands out to you in this one?
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I mean, I I know there's some concerns that we have around like the 120-day delay implementation, you know, we saw stockpiling during the Biden years with the moratorium, but you know, I I think on the whole, uh Under Secretary Kessler and his team, they really presented here the most comprehensive framework we've seen.
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Um and and you know, we've heard from other members this should be a model for other 232s, or you know, why didn't they do this for our sector?
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So what stands out the most to you?
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What do you think they really got right?
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What should we be watching for?
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Well, so let me start with the the first one, which uh, you know, I think is something that might not be as obvious.
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But they tried as hard as possible to get the market price to be at these levels.
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And by that I mean they have set the minimum import price standard as what it is.
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So that's that's the value that actually needs to be declared when you enter the merchandise into the United States.
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And if you're not at that level, what they've provided for is a specific tariff.
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And so when you think about it through the lens of what is the actual cost to me as the importer, so driving the cost elements, and and this is gonna be right up my here's uh line of thinking because I'm going right into economics, right?
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So, and this would be a great study to do.
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But you have a 15% that is applied on the entry value.
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And so intrinsically, as we just talked about with the special tariffs, when I think about offsetting any tariff impact, the first thing I think about is valuation.
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Could I reduce my entry value by a certain amount to offset the percentage?
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Well, guess what happens when you do it here?
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If you were to reduce the value below 22 cents per sell per watt for a sell uh to get away from the 3.3 cents that you would have to pay uh in the 15%, what you end up doing is actually adding an amount to get you back up to the 22 cents because they provided for a specific tariff that carries you up there.
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So let's say I reduce my sell import uh entered value to 20 cents per per watt.
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Well, all of a sudden, my actual tariff impact is five cents because I paid three cents for the 15% times the 20 cents, and then I have a two cent special tariff to get me back up to 22.
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And so by reducing my entry value, I'm worse off from an importer standpoint.
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So that's the first thing is that it's actually going to drive people to have to, you know, bring their entry values up.
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And that's actually gonna be an interesting proposition for some people because then you turn around as the importer of record and you say, okay, I paid this much for the product.
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I'm gonna need to turn some kind of profit in the US, right?
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And so they're gonna have to turn around and sell it to the first unrelated supplier for maybe a half a cent or a full cent higher per watt, even though the related party cost of production is much lower.
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So that's the first thing is that that the specific tariff actually has bite to it that I don't think people uh it realize.
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I mean, it it there the world is is changing with that specific tariff because it's it's an absolute value of a cent each time you go down.
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It's not a percentage figure.
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So that's the first thing.
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The second thing is they have employed a certification regime that has been lacking in a lot of the suspension agreement context that I've talked to you about uh before.
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Uh for years we had a suspension agreement with Mexico in uh trade in tomatoes.
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Uh it's a uh a case that our firm has been involved in uh for a number of years.
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And when Assistant Secretary Kessler was actually assistant secretary of enforcement and compliance, we were often in there with our clients and explaining to him why suspendure agreement was working, and he would say, Well, help me understand that because we've set a minimum import price.
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Like, what's the problem?
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And we'd say, Listen, come with us to the LA terminal market, and you'll be able to see wholesale tomato prices well below that minimum import price.
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So he gets it.
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What he understands is that it can't just be on the import side because you know people are gonna, you know, move money around and do whatever.
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What they've created is this certification regime that requires you to certify to selling to the person related party.
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And guess what?
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If you don't certify or don't have the certifications, they're not just gonna apply penalties like we saw with the people who violated the tariff moratorium in solar.
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What they're going to do is they're gonna say, you can no longer import.
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That's as draconian as it gets.
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And so this is like the first time that I've seen them go to that level of a penalty, right?
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It you know, people would be fine, you know, taking a penalty of, you know, the full value of the merchandise they're found to be committing customs fraud.
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You commit some sort of violation here, which is simply not keeping a certificate or not supplying the certificate to CVP, you can lose your importation privileges, which means no more US market access.
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So those are the two things that I would call out as particularly um impactful with this one.
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And let me just comment really quickly on the four-month rollout period.
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You know, as somebody who lived through the Biden tariff moratorium, which was like the worst policy decision that probably was ever made with regard to you know dealing in trade, um, because it it set a red line of when it was going to end.
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So everybody was racing towards that finish line.
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Um, we ended up having, you know, stockpile of merchandise here in the US that far exceeded deployment of this stuff.
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You know, I I represent US companies.
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I had Chinese companies calling uh left, right, and center saying, can't you do something about it?
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Because we're getting hammered on price because everybody is bringing stuff in.
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So, like when the Chinese are saying the price is too low, that's when you know there's a real problem.
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Um but with this four-month one, they've actually put in a provision of referencing anti-stockpiling.
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And what I what why that is important is during the pendency of this 232 investigation, because of the uncertainty as to when it would drop, the trade was actually sort of holding back on projects.
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There, there you know, there was almost like this this reticence to bring in a lot of merchandise to try to to try to do something because the the the financing wasn't there, people were waiting on the sidelines to see how this one one shook out.
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Because there's a lot of information going on in in the atmosphere is that is it gonna be 100% tariffs, is it gonna be this, that, or you know, is there gonna be shortage of things?
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Um all of this was going on.
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And so what you had was actually almost a flattening of importation behavior.
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You had new entrants come in and like so there are spikes of things, but it it wasn't like you know, you would see this like crest of a wave.
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And so, because of that, I think what they've actually done is looked at those data and said, well, we're gonna be able to see stockpiling because if we see an uptick that wasn't there before, that's gonna be stockpiling.
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And so I think if you're an importer who is going to be, you know, trying to race to get this stuff in before December uh fourth, I think there's a real problem that you're gonna be facing that they're gonna be looking at uh, you know, very clearly.
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And again, that that that sort of Damocles over every importer's neck here about you can no longer import.
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You know, some of these companies don't just import cells and modules, they're importing raw materials to you know produce here in the US.
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If you can't import that stuff, I mean that's a real risk.
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And I think companies are gonna take, you know, a second to say, hold on, like let's be let's be mindful about what this all means.
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Yeah, that's a word fit.
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Yeah, I mean I think I think we got a good handle, I think, in that first segment about you know what this uh action does, and it finally seems like it's got some teeth, it's got some enforcement um i involved in it, and I think it we understand why, because of all the different ways that you know these policies can be circumvented.
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So I thought it would be good to maybe transition over to the second segment, which was how Beijing, you know, cornered the material in the first place.
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So just to lay up just to give a lay of the land, China has produced like 93% of the world's polysilicon last year.
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Nine of the ten largest producers are Chinese.
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One of their companies alone can make roughly 910,000 tons a year, whereas America's largest producer might make up like 35,000.
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Um and this is kind of a playbook that we've covered, which is pretty familiar to us at CPA.
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We talk about how China has built these choke points.
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Um, but you know, as an economist and the things that I learned in school, we talked about like comparative advantage and how, oh, you know, you just have natural endowments in one thing and you trade and all it's kind of it looks great on a textbook, but but this to me isn't necessarily about a story about like, you know, just um you know, natural endowments or comparative advantage.
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It seems like largely, of course, the pot product of policy.
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I mean, there's a reason why China is able to undercut, you know, any you know, seller in the US.
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Um, because we are making this stuff.
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We do have you know hemlock semiconductor, um, we do have uh Vokker, you know, and and these are the these kind of policies that we have are are needed to kind of keep them uh competitive.
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But but talk maybe a little bit about how Beijing accumulated the the resources to kind of build this choke point up.
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And we'll start there on the policy front.
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Yeah, so uh I mean the thing that China has that we don't have is they've got a single party system where the head of the government gets to determine what they do and what they focus in on.
00:21:08.960 --> 00:21:29.920
And so when you go back in time, um, you know, as China entered the modern um world and was led into the World Trade Organization, which meant we brought down all the tariffs worldwide on China, um, and they came into the fold of international trade, they developed what are called five-year industrial plans.
00:21:30.000 --> 00:21:37.920
And these five-year industrial plans would identify specific sectors of the economy that they wanted to um engage in.
00:21:38.559 --> 00:21:46.079
And every single one of those industrial plans, if you read them, indicates a desire to be dominant worldwide.
00:21:46.400 --> 00:21:54.960
And that I think is a different animal than anybody else has ever seen in modern history of being dominant worldwide.
00:21:55.119 --> 00:22:05.039
I mean, when you think about like being dominant worldwide, I immediately go into a World War II thing, like dominance in the skies, like it is battle cry type of thing, right?
00:22:05.759 --> 00:22:16.079
This coming in the context of economic policy, I look at it as battle cry type of thing there too, which was we are coming out into the world and we're going to take advantage of this.
00:22:16.240 --> 00:22:26.400
So if you go back, I think into 2006 is when you first start to see polysilicon and the polysilicon sectors enter into these five-year plans.
00:22:26.640 --> 00:22:38.079
And so what you have over the period of time is that there's a message from the top that says these are the areas that we're going to focus in on, and we're going to do everything we can to support them.
00:22:38.240 --> 00:22:39.839
Well, what do they do to support it?
00:22:40.079 --> 00:22:45.759
Well, if you want to build a factory in China, you can get land for free from some of these industrial zones.
00:22:45.920 --> 00:22:46.880
They'll give it to you for free.
00:22:46.960 --> 00:22:47.759
You don't pay rent.
00:22:47.839 --> 00:22:48.960
You pay no rent.
00:22:49.039 --> 00:22:50.160
You don't have to buy the land.
00:22:50.319 --> 00:22:51.359
You get it for free.
00:22:51.599 --> 00:22:55.519
Some will say, okay, you come into our industrial zone, we'll give you electricity for free.
00:22:55.680 --> 00:22:58.000
And they can do that because it's all coal-fired power.
00:22:58.160 --> 00:23:04.000
So really, really cheap stuff, really, really dirty stuff, the stuff that's causing pollutants in the air constantly.
00:23:04.240 --> 00:23:09.200
Ironically, they're saying, don't blame us because we're doing all this green energy stuff.
00:23:09.279 --> 00:23:12.319
Yeah, well, you're building it with the most disgusting material possible.
00:23:12.880 --> 00:23:22.400
Um and so what they did was they were able to do that to help prop up and start their industry, but then that wasn't enough because they couldn't compete with US know-how.
00:23:22.559 --> 00:23:32.160
So what they did was um over the course of time, they started to take on things like uh chip manufacturing, which was sort of like the downstream of poly.
00:23:32.319 --> 00:23:38.559
And the polysilicon producers here in the US had to sell into the Chinese markets and make those chips.
00:23:38.880 --> 00:23:42.559
Well, all of a sudden there was a hundred percent tariff on U.S.
00:23:42.640 --> 00:23:43.599
polysilicon.
00:23:43.680 --> 00:23:46.640
And so we've lost the biggest market in China.
00:23:46.720 --> 00:24:01.279
So they basically did stand up their stuff, make somebody, you know, available for the know-how, learn US ways, then protect the market by cutting up the US and then creating a built-in market structure for themselves.
00:24:01.440 --> 00:24:13.119
And the way that they do that is that that's the most, you know, I don't know if you want to say diabolical, but I I I'll go there, is that they want to have the entire supply chain be dictated by their companies.
00:24:13.279 --> 00:24:27.119
And the reason why I say it's diabolical is because if you go back to 2018, you had a period of time where you had new technologies in cell production for generating more power from the sun's rays.
00:24:27.200 --> 00:24:30.000
And these were, you know, sort of like moving in parallel.
00:24:30.079 --> 00:24:33.839
There was like the baseline stuff, and then there was like the more advanced stuff.
00:24:34.079 --> 00:24:40.000
Well, China saw what was happening and they said, well, hold on a second, like we're gonna pump the brakes on this thing.
00:24:40.160 --> 00:24:51.039
And what they did was they went to the um uh equipment manufacturers that stopped making the equipment to make those specific size cells for that technology.
00:24:51.279 --> 00:24:57.200
You need to start making equipment for bigger wafer making for bigger cells for a different technology.
00:24:57.440 --> 00:25:06.880
And so they basically changed the entire trajectory of the marketplace by having the ability to make the equipment to do the cell production.
00:25:07.119 --> 00:25:10.400
Like that's where it's so like mind-blowing, right?
00:25:10.480 --> 00:25:11.839
And how do they do that?
00:25:12.079 --> 00:25:17.599
They all get in a room and talk, and they say, You're gonna do this, and you're gonna do that, and you're gonna do this.
00:25:17.839 --> 00:25:38.319
If you go back two years where we had this massive glut of production in the in the world market of solar, you had basically China having weekly meetings with the major companies saying, You're gonna curtail production this week, you're gonna stand down production, you're not gonna hire, you're not gonna produce, you're not gonna do this.
00:25:38.559 --> 00:25:44.000
And then the other thing is they have the wherewithal to be able to stand up the demand sector.
00:25:44.160 --> 00:25:53.440
So even though they were telling people to curtail production, they basically were installing, you know, all this sol all the solar fields, you know, all throughout China.
00:25:53.680 --> 00:25:57.680
But I'll tell you what, hardly any of them are actually connected to the grid.
00:25:57.920 --> 00:26:06.400
And they're not connected to the grid on purpose because they're basically saying we're gonna find somewhere to put all this stuff to have you know production to be able to stand up this.
00:26:06.480 --> 00:26:16.240
But we're not gonna undermine our coal-fired power plant because that's what drives our competitiveness in every other sector, including, you know, aluminum and steel and be able to undercut the world prices there.
00:26:16.400 --> 00:26:21.119
So, you know, this is a it's a really interesting um history here.
00:26:21.279 --> 00:26:34.160
I mean, I think we could probably spend hours talking about those five-year plans, but it really does go back to you know baseline 2001 when China was all led into the WTO and and the world market was open to it.
00:26:34.960 --> 00:26:50.799
Yeah, and I I guess, you know, what oh I'm sorry, Nick, did you want to jump in or maybe well I I think just one of the most interesting points about this this is so different from what we're used to seeing, you know, in the US and and maybe even in European markets.
00:26:51.359 --> 00:27:06.559
Uh but it's really important for policymakers to understand that you know when we're designing policy in the U.S., whether it's trade policy, industrial policy, it it's always with you know the mindset that we want these private companies to be profitable.
00:27:07.200 --> 00:27:12.480
You know, and and if they if they're driving profitability, they're able to invest, they're able to grow.
00:27:13.039 --> 00:27:17.359
Uh with the Chinese, they don't care about profitability at all.
00:27:17.680 --> 00:27:20.960
Uh they simply care about capturing global market share.
00:27:21.359 --> 00:27:32.640
And I think it's why a lot of our policies have failed to not necessarily fail to make an impact, but certainly failed in the past to deliver the kind of results that were promised of them.
00:27:33.119 --> 00:27:43.279
Um I think what is is so unique about this new polyproc, and you know, maybe as we we wrap, we should think about what what can we judge its success by.
00:27:43.759 --> 00:27:53.440
Uh but it's clear that that commerce and the Trump administration with this one is really thinking about we're recognizing that China doesn't care about profitability.
00:27:53.599 --> 00:27:57.039
They'll drive the price down as much as possible to have access to the U.S.
00:27:57.279 --> 00:27:57.599
market.
00:27:58.160 --> 00:28:05.599
And they responded with a framework that I think accommodates that in a completely new way, you know, to keep them out of the U.S.
00:28:05.759 --> 00:28:08.160
market where they can really undervalue product.
00:28:08.480 --> 00:28:13.119
Uh because as Tom said, if they undervalue the product, they get hit with a specific tariff.
00:28:13.200 --> 00:28:14.480
That's very punitive.
00:28:15.039 --> 00:28:23.039
Um, if if they import at the MIP level, you know, then I think we have to judge, you know, are the MIP levels at the right spot?
00:28:23.200 --> 00:28:24.240
Is everything working?
00:28:24.480 --> 00:28:40.720
But you know, maybe just as we were looking towards, you know, the future of this, um, and I do think, you know, this will be heavily judged if it's successful or not, because there's been so much policy around solar uh in particular on trade.
00:28:40.960 --> 00:28:50.880
Um what are things, you know, we obviously represent the entire supply chain, you know, of manufacturers at CPA from poly all the way through to module.
00:28:51.200 --> 00:28:55.920
Uh I think when we talked with Commerce, you know, they really wanted to see still and wafer investment.
00:28:56.079 --> 00:29:02.799
But you know, as as someone who's been in this sector longer than we have, you know, Tom, I mean, what what are you looking for to see?
00:29:03.039 --> 00:29:08.480
You know, is is there certain trade things you're looking for on import levels or pricing or investments?
00:29:08.640 --> 00:29:09.519
Is it all of it?
00:29:09.680 --> 00:29:11.200
You give us a a little preview.
00:29:11.599 --> 00:29:18.319
Yeah, so the first thing I'm looking for is is the minimum import price that's carried through to the market price going to stick?
00:29:18.559 --> 00:29:24.240
And by that I mean the first concern that I have stems from my history in in ag.
00:29:24.880 --> 00:29:27.680
And it's you know, that tomatoes example, right?
00:29:27.920 --> 00:29:32.720
Let's say I caught the guy with the tomatoes selling them below the minimum import price.
00:29:33.039 --> 00:29:38.400
Well, next week what he's gonna do is he's gonna be selling tomatoes bundled with green peppers.
00:29:38.559 --> 00:29:42.799
And I'm not gonna be able to show where the offsets are there.
00:29:43.039 --> 00:30:12.400
And that's I think the major concern I have is that you know, we need to be thinking about what does enforcement look like if we all of a sudden see a Chinese company that acquires a installation or distribution or um uh uh a developer, and they can basically bundle to the first unrelated party the whole can caboodle, right?
00:30:12.480 --> 00:30:22.880
And all of a sudden you go from you know 38 cents per watt for a module down to like a blended price with installation and everything like that that is far below that.
00:30:23.039 --> 00:30:26.559
And I'm not sure how visible that will be in order to be enforced.
00:30:26.720 --> 00:30:33.200
And so that's an element that I think you know, baseline we've gotta we'd gotta be talking about enforcement there.
00:30:33.519 --> 00:30:38.960
The second thing that I think is uh uh uh you know, is this going to be successful?
00:30:39.279 --> 00:30:43.839
Is really kind of close the donut hole in the supply chain.
00:30:44.000 --> 00:30:48.240
And the biggest donut hole right now is Engiproing and wafer making.
00:30:48.640 --> 00:31:02.640
And people might not think this is particularly special because all you're doing is you're taking the polysilicon, you're putting it into like a lab structure, you're growing this beautiful ingot, and then you're using a laser slicer to slice that into wafers.
00:31:02.720 --> 00:31:06.400
And you know, you'd sort of like shrug and say, okay, like how hard is that?
00:31:06.640 --> 00:31:09.920
I mean, from the technology perspective, it's not, it's the machinery.
00:31:10.079 --> 00:31:26.160
Where it gets really hard in the United States is that we have a regulatory environment that doesn't like a lot of water usage that you know is not necessarily going into consumption by you know animals or people uh or things like that.
00:31:26.400 --> 00:31:30.160
And and wafer making and ingot growing takes a lot of water.
00:31:30.240 --> 00:31:31.839
It also takes a lot of energy.
00:31:32.079 --> 00:31:37.200
And the environment that we're in with new AI data centers, you know, those energy costs are going up.
00:31:37.359 --> 00:31:56.000
And so from a US policy perspective, you know, are the differentials where you've got$100 per kg equivalent for wafer to 22 cents per watt for cell, is that delta significant enough to incentivize the wafer making to come online?
00:31:56.160 --> 00:31:58.319
Because that's really the biggest problem that we have right now.
00:31:58.480 --> 00:32:02.720
We can't really control our own destiny because you've got to go offshore for wafers.
00:32:02.880 --> 00:32:14.640
And just as I said with regards to the equipment uh example from 2018, you also had wafer changes over the course of the 2010s where China was constantly changing the wafer sizes, which dictate the cell sizes.
00:32:14.880 --> 00:32:22.720
So if we can get away from having to rely on others for the wafers, that's where I think this policy can can also be successful.
00:32:22.960 --> 00:32:27.119
And the final thing I'll say, I mean, does this go far enough?
00:32:27.359 --> 00:32:38.480
The supply chain for a bill of materials to produce uh a solar module, you know, a solar cell, includes a lot of materials that we probably want to have produced here in the U.S.
00:32:38.640 --> 00:32:44.400
I mean, I think the people who you know produce extruded aluminum, like they produce great things.
00:32:44.480 --> 00:32:48.720
I mean, you bought a boat in Florida, like half of the stuff there is extruded aluminum.
00:32:48.880 --> 00:32:52.079
I mean, we want to have the ability to make some really nice stuff here.
00:32:52.240 --> 00:32:53.920
Well, solar frames are in that space.
00:32:54.000 --> 00:32:54.480
And guess what?
00:32:54.640 --> 00:33:02.319
Steel is actually a great uh framing technology too, with with uh some of the stuff that you know the companies are doing in the steel sector.
00:33:02.400 --> 00:33:05.599
And so is that an area that we should be talking about protecting?
00:33:05.759 --> 00:33:11.759
The other thing is, you know, things like um uh paste and uh electromaterial inverters.
00:33:11.839 --> 00:33:19.440
I mean, there's a lot of stuff that goes into the bill of material that are things that are sensitive and go into technology elsewhere.
00:33:19.519 --> 00:33:21.599
And so it's something that we could be thinking about.
00:33:21.680 --> 00:33:25.440
You know, China is the dominant supplier of silver paste in the entire world.
00:33:25.759 --> 00:33:27.440
Could we have silver paste production here?
00:33:27.599 --> 00:33:27.920
I don't know.
00:33:28.000 --> 00:33:38.240
I mean, we've got the ability through mining to have that, including if our relationship with Canada gets resolved this week uh with certain trade deals, there's opportunities there for silver paste.
00:33:38.319 --> 00:33:43.599
It's almost like I'd like to have a Fortress North America idea with respect respect to these types of articles.
00:33:43.680 --> 00:33:51.039
And that's where I'm wondering if a version 2.0 of this, if we start to see things work well, includes more of that build material.
00:33:51.839 --> 00:33:53.279
Yeah, that's a great point.
00:33:53.759 --> 00:34:03.440
We we actually have the aluminum extruders, and uh they they used to make these frames for the solar sector, you know, years ago.
00:34:03.599 --> 00:34:10.639
Uh and and we saw that, you know, their their ability to provide this um profitably, you know, where they weren't being undercut.
00:34:10.960 --> 00:34:17.280
We saw that go away fairly quickly once, you know, we we saw the trade protection sort of degraded on the aluminum side.
00:34:17.440 --> 00:34:29.440
But I think there's there's a lot of interesting things you said there, and and really getting into something, maybe a little foreshadowing of something that we've been talking about, which is there's all this energy generation happening.
00:34:29.599 --> 00:34:36.239
You know, it's not just the solar panel or the natural gas turbine, but it's all the different pieces that go into it, the copper wiring.
00:34:36.639 --> 00:34:40.960
Um, you know, could we see some type of energy generation 232?
00:34:41.280 --> 00:34:44.559
There's a huge boom happening in the AI space.
00:34:44.800 --> 00:34:50.079
Uh we've seen, you know, uh huge demand for more gigawatts to the grid.
00:34:50.239 --> 00:34:54.400
Uh I think we're importing like 80-some percent of the equipment to do energy generation.
00:34:54.480 --> 00:34:54.559
Uh.
00:34:54.800 --> 00:34:57.440
And you know, why wouldn't we want to make more of that here?
00:34:57.920 --> 00:35:07.760
Uh and I think the the really the huge benefit to all that is we start to see this web of like interconnectedness where the industrial sectors, you know, overlap.
00:35:08.159 --> 00:35:10.800
You know, it's not just solar, but it's aluminum, it's steel.
00:35:10.880 --> 00:35:18.880
You know, a company like um, you know, NextPower, you know, formerly Next Tracker, right, an incredible company building a whole bunch of stuff.
00:35:19.039 --> 00:35:27.360
You know, they're a technology, they're a steel company, um, you know, they're building systems for utility scale solar, but they use all of our members' materials.
00:35:27.440 --> 00:35:30.880
You know, I think they they purchase steel from our member companies.
00:35:31.039 --> 00:35:35.280
Um these are the kinds of companies that are benefiting from this type of policy, right?
00:35:35.360 --> 00:35:38.960
It's not just the solar manufacturer, the polyproducer.
00:35:39.119 --> 00:35:41.840
You know, so the jobs we created really spread out.
00:35:41.920 --> 00:35:43.440
Um, well, definitely that.
00:35:43.519 --> 00:35:52.559
I mean, one of the things that you often hear from opponents of of solar um uh is that you know it only works when the sun's shine.
00:35:53.440 --> 00:35:57.360
Yeah, that's true, up until you get to battery storage.
00:35:57.679 --> 00:36:07.039
Because battery storage is the key that unlocks the ability for solar to be a 24-hour supply source, right, from an electricity perspective.
00:36:07.199 --> 00:36:18.800
And and what you see at a lot of these new bills is that actually battery storage is in fact being you know built into the whole premise of what's going on there.
00:36:18.880 --> 00:36:34.480
And that actually makes a lot of sense just from an energy policy perspective, because just like in in solar, you know, net gas, you'll see fluctuations over the course of a day hourly, you'll see fluctuation in the price of net gas.
00:36:34.639 --> 00:36:41.039
Well, that does drive some impact through the supply chain.
00:36:41.280 --> 00:36:49.679
And if you got to battery storage at scale here in the US, which I I would like to, I think that's like the next frontier of what we need to do here.
00:36:49.840 --> 00:37:04.559
Um, you you get the benefits of having these sources be a little bit more constant because you can draw from those at these larger uh electricity-intensive uh programs like an AI data center.
00:37:04.719 --> 00:37:18.400
Um, you know, you can you can have solar on the roof, you can have that augmented with NAT gas, and it all goes into a battery storage facility that's like literally right next door to you, and you can draw power through the day, through the night.
00:37:18.559 --> 00:37:19.519
And guess what?
00:37:19.679 --> 00:37:30.480
I I guarantee you, if we got there, everybody who was looking at their electricity bills now from the consumer perspective would say, Holy cow, my electricity bills are going down.
00:37:31.039 --> 00:37:35.440
Because we would then have we would then have it all make sense through VS Disas.
00:37:37.440 --> 00:37:38.079
Yeah.
00:37:39.360 --> 00:37:42.559
I was thinking, I was thinking like, so we've covered a lot of ground.
00:37:42.639 --> 00:37:49.760
I wanted to move us to the the third piece, and and Tom, you kind of have kind of um mentioned a little bit raising the question about like will this work?
00:37:49.840 --> 00:38:07.920
And I wanted to step back for a second and think about, you know, from from my vantage point, I think about a lot of the policies that have been uh implemented to try to, you know, try to limit China's rise in this in this space because of you know whether it's aiding dumping, countervailing duties that, you know, and and you know, you dated yourself a little bit.
00:38:08.000 --> 00:38:09.280
I d I'll date myself a little bit.
00:38:09.360 --> 00:38:25.679
I was I was at the ITC during the time when a lot of these trade cases were happening, a lot of these AD C B D duties coming out, and happened to see just like how China had a was really adept at circumventing these rules and just upping uh uprooting production and moving it to a different jurisdiction, all of a sudden it's in Southeast Asia.
00:38:25.920 --> 00:38:34.239
And then even seeing, you know, you mentioned uh the the I think it was the uh the two-year holiday uh on Southeast Asian panels that we then allowed uh to happen.
00:38:34.320 --> 00:38:37.440
And there's been some policy inconsistencies that we've had.
00:38:37.760 --> 00:38:40.079
So I get back to the question of like, will this work?
00:38:40.239 --> 00:39:00.239
How important is it to number one just be on the same page, whether whether whatever administration we have in place, um the consistency of focus on this issue, and then also just uh appropriately leveraging the tools that we have to try to um really just kind of limit this kind of activity, this kind of malfeasance that we're seeing from China.
00:39:00.800 --> 00:39:03.920
So let me just put it really simply, no loopholes, right?
00:39:04.079 --> 00:39:07.039
Like once you create a loophole, that loophole will be exploited.
00:39:07.119 --> 00:39:12.079
And and Mary, you may remember this from your time uh at the ICD.
00:39:12.239 --> 00:39:20.960
We for years we didn't have uh a safeguard uh because of the way that the World Trade Organization reacted to the way we applied the safeguard measures.
00:39:21.119 --> 00:39:32.800
And when when the Trump administration said, enough, we're not gonna have you know six unnamed bureaucrats in Geneva tell us how to interpret our laws, uh, we all of a sudden have the ability to bring safeguard cases again.
00:39:33.039 --> 00:39:36.719
The solar safeguard was one that was an opportunity.
00:39:36.960 --> 00:39:42.960
And by that I mean, you know, there there was the ability to instill some discipline in the market.
00:39:43.119 --> 00:39:46.559
Uh safeguard remedies have a lot of different benefits to them.
00:39:46.639 --> 00:39:52.960
There it was a a tariff-free quota as well as as a tariff, and it was universal in application for the most part.
00:39:53.199 --> 00:40:15.039
The exceptions were, you know, for developing countries, and there we didn't really have a lot of the whack-a-mole problems until a couple of years into the into the safeguard when all of a sudden Cambodia, you know, known solar powerhouse Cambodia, came onto the scene uh not because they were really good at the technology, but they were excluded from the safeguard as a as a developing country, quote unquote.
00:40:15.360 --> 00:40:21.199
The next thing that happened, though, was that we excluded from the safeguard what were called five-facial panels.
00:40:21.280 --> 00:40:25.119
So this is where you generate electricity on both sides of the panel.
00:40:25.599 --> 00:40:32.639
That was pushed by uh big energy companies who said, this this technology doesn't exist in the United States.
00:40:32.960 --> 00:40:45.280
Well, had anybody picked up the phone to call one of the longest running US producers in auxin solar, oxen would say, here's three different projects we just did on bifacial panels.
00:40:45.360 --> 00:41:06.480
And so once they excluded bifacial panels with this pitch by the energy company saying they couldn't get it, um, all of a sudden you had a situation where the Chinese were essentially painting the bifacial panels black in order to put them on a roof and still call them bifacial panels, even though they were only like on a roof generating electricity from one side of the panel.
00:41:06.719 --> 00:41:10.960
And so this the summary of all this is no loopholes.
00:41:11.119 --> 00:41:12.000
We can't have them.
00:41:12.159 --> 00:41:18.239
And so, like the reason for this 232, why it's so great, is that A, no developing country loopholes.
00:41:18.400 --> 00:41:29.519
So you're not gonna go and be able to go to you know where China's going now in Africa to you know set up a module making facility using all Chinese bill material and then ship it to the US.
00:41:29.679 --> 00:41:33.280
That ain't gonna happen now to avoid these the the this measure.
00:41:33.679 --> 00:41:36.960
B, you're you you we're not gonna exclude any product, right?
00:41:37.039 --> 00:41:41.360
You could see here this is modules writ large, cells writ large.
00:41:41.440 --> 00:41:43.679
Like nothing is called out as an exemption.
00:41:43.840 --> 00:41:52.800
And I think if you're you know it if folks who are listening to this come to DC and they go to the White House and they mention the word exclusion, it's like saying a four-letter word to your grandmother.
00:41:52.960 --> 00:41:55.440
Like you're gonna get you're gonna get slapped for doing it, right?
00:41:55.760 --> 00:41:57.679
We're not talking about exclusions anymore.
00:41:57.840 --> 00:41:59.840
We're having these universal tariffs.
00:42:00.000 --> 00:42:10.800
And so those two things on their own should address some of the things that we've had happen in the past that undermine the remedies that have been put in place.
00:42:11.199 --> 00:42:18.880
Lastly, though, I think what is so important is that we have a continuity in policy.
00:42:19.119 --> 00:42:34.639
You know, in the United States, for better or worse, we have lots of process for people to say, I don't want this facility in my backyard, I don't want you to build this new facility, I need to get permission to get this type of electricity, this type of water.
00:42:34.800 --> 00:42:37.360
It takes time to get these things up and running.
00:42:37.599 --> 00:43:02.559
To have this going into place in December of 2026, and then if we have a change in administration, and all of a sudden in the middle of you know 20 2030 or or after we have all this stuff pulled out from under us, you know, we're gonna be in a worse-off position because there's gonna be companies who are gonna say, you fooled me once and yet I still made an investment, and then you fooled me again.
00:43:02.800 --> 00:43:21.440
And I think that's where you know I think the risk is is that you know, in 2029, you know, and early 2029, if there is a switch in administration, there's going to be this impulse, uh, especially in solar for some reason, this impulse to side with like the installation side of the business.
00:43:21.679 --> 00:43:33.440
And I'm hopeful that we have a full calendar year of 2027 and all of 2028 to prove everybody wrong that having minimum import prices is not going to be ruinous for the industry.
00:43:33.519 --> 00:43:35.519
It's not going to put people out of jobs.
00:43:35.679 --> 00:43:40.079
In fact, what I'd say is it's going to give more opportunity for more jobs.
00:43:40.239 --> 00:43:43.119
It's going to provide more opportunity for investment in the United States.
00:43:43.280 --> 00:43:57.519
Some of the some of the money is that sitting on the sidelines is going to come into the sector and say, let's put, let's, let's put a solar uh cell facility in in one of these one of these uh states that that we can we can rely on to be supportive.
00:43:57.679 --> 00:44:02.880
Let's put in a wafer making facility because we Got uh you know the ecosystem set up.
00:44:02.960 --> 00:44:10.559
And you know, I think from there, if we have that happen, what I would hope is that the people who are all for green energy look around and say, you know what?
00:44:10.800 --> 00:44:12.960
This is green energy through and through.
00:44:13.119 --> 00:44:19.519
It's not dirty coal, it's not international shipping, it's not benefiting from forced labor policies.
00:44:19.679 --> 00:44:29.599
It is truly, you know, getting back to what America created in the 1950s when we first came up with this technology and then mastered it in the 2000s before China stole it from us.
00:44:30.800 --> 00:44:31.360
Yeah, yeah.
00:44:31.679 --> 00:44:39.840
At the top of the show, I called Beijing the gatekeeper of this material, and August 6th, the the proc was like the first action aimed at what we call the gate itself.
00:44:40.000 --> 00:44:43.760
So the whole chain is being tackled at once instead of one case at a time.
00:44:43.920 --> 00:44:51.760
And Tom, I think before we let you go, I wanted to ask you real quick, what's the one thing you'd want our listeners to take away about this action?
00:44:53.519 --> 00:45:01.119
So over the course of a number of years I've been arguing for tariffs on solar cells and modules.
00:45:01.440 --> 00:45:04.719
And I have received a lot of hate mail.
00:45:04.960 --> 00:45:14.800
I've been told that I am um in the pocket of big oil, that I want nothing more than, you know, uh a dirty life.
00:45:14.880 --> 00:45:25.280
Uh I want nothing more than, you know, three centigrade of increase to the global temperature when, you know, one and a half is is accepted as as too much.
00:45:25.599 --> 00:45:43.519
Um what I would say is what I'm in favor of is having the ability to control our own destiny, having good paying jobs in areas of the country that have been forgotten in some respects and looked down upon in other respects.
00:45:43.760 --> 00:45:46.159
And there is dignity in work.
00:45:46.320 --> 00:46:04.800
Um what I will tell you is when I travel to visit clients in all sectors and I get to go to a factory, it's one of the best parts of my job, honestly, because I get to sit and talk with people who I may never come across in my life in the normal course of the day.
00:46:05.039 --> 00:46:07.599
Um, you know, they're working really hard jobs.
00:46:07.679 --> 00:46:09.920
I'm lucky to be in an office in Washington, D.C.
00:46:10.239 --> 00:46:17.679
But when we sit down and talk about it, what I hear from them is um we just want a level playing field.
00:46:17.840 --> 00:46:21.920
If you give us a level playing field, we're gonna work just as hard.
00:46:22.000 --> 00:46:24.639
We're gonna actually make better products because we care.
00:46:24.800 --> 00:46:25.440
And you know what?
00:46:25.599 --> 00:46:32.960
We want to be able to walk down the street and see that solar farm that you know the municipality is putting in be US-made product.
00:46:33.119 --> 00:46:42.480
I want to drive down the highway and I want to see the cranes that I help build or that are helping build infrastructure here be US made cranes and not warren cranes.
00:46:42.559 --> 00:46:55.519
Like there's something about the dignity of putting your hands on something and making something and then seeing it in reality and being able to look at your kid and feel good about what you're providing for them and saying that's what that's what dad and mom made today.
00:46:55.679 --> 00:46:56.639
Like that's what we did.
00:46:56.800 --> 00:47:11.360
And that's where I what I would say to everybody who's listening is that you know, if we make it here, we're be better off for it, health-wise, work-wise, personality-wise, professional-wise, like we're all gonna be better for it.
00:47:11.440 --> 00:47:12.159
And you know what?
00:47:12.320 --> 00:47:22.800
If we can all sit down and understand that um, you know, if we have jobs in this country and we're making things in this country, we'll be able to have dignity and look at each other.
00:47:22.960 --> 00:47:29.519
I guarantee you that all of us who have kids are gonna look at our kids and say, we've definitely done right by you.
00:47:29.599 --> 00:47:31.519
And that's where I come out at this.
00:47:32.719 --> 00:47:34.000
Yeah, I love that.
00:47:34.239 --> 00:47:34.719
I love that.
00:47:34.880 --> 00:47:38.719
Yeah, you got me fired up to do get back to my desk and do some work this evening.
00:47:38.880 --> 00:48:01.920
And I'll tell you what, uh, just as a real quick uh re reminder, uh, I don't think that the folks you know in in China can necessarily look at the the labor force in in Xinjiang and and and say that sort of pride and the dignity uh that you just mentioned and the importance of that because like they're they're robbing their workforce of dignity, you know, and all in the name of getting a lower price, you know, polysilicon and all the other products that they're putting out there.
00:48:02.079 --> 00:48:04.400
Um so you know, I had to throw that out.
00:48:05.119 --> 00:48:06.719
Isn't that something that's nice to have here too?
00:48:06.880 --> 00:48:08.960
Like let's let's let's take one step back.
00:48:09.199 --> 00:48:12.320
We've created a minimum import price for the United States, okay?
00:48:12.559 --> 00:48:17.039
What that means is that you no longer have to force somebody to do labor.
00:48:17.199 --> 00:48:18.000
You can pay them.
00:48:18.239 --> 00:48:21.599
You can actually pay them more when it's the dirtiest stuff in the world.
00:48:21.840 --> 00:48:43.679
And so for all the people on the left who want to, you know, have you know, say that this president goes too far in this space, goes, you know, way down the line too far in trade, is not, you know, is not thinking about it, you know, there's a person who is being forced to do work to build this stuff in the worst conditions.
00:48:43.840 --> 00:48:49.360
I mean, there are some of the the materials that go into this are sometimes really nasty materials.
00:48:49.679 --> 00:48:59.280
And wouldn't it be great knowing that you can sell this product for 22 cents a watt for a cell or 38 cents a watt for a module, and be able to say, you know what?
00:48:59.440 --> 00:49:08.719
I could pay that person a couple more uh RMB per hour because, you know, all of a sudden I've got this space because the market is correcting itself.
00:49:08.880 --> 00:49:13.039
We're no longer in this unfair market where I also need to be unfair to my people.
00:49:13.199 --> 00:49:18.880
And so, you know, uh you bring up a really good point that there are there's hope, I guess is what I would say with this.
00:49:18.960 --> 00:49:22.800
And that that may be the best thing to say about the T32 program.
00:49:23.360 --> 00:49:27.039
Yeah, you're not just in vet you're not just paying a wage, you're investing in communities.
00:49:27.119 --> 00:49:30.559
I mean, if there's a it's a multiplier effect to all of this, it's so critical.
00:49:30.719 --> 00:49:34.960
Um, Tom Boleyn, thank you of Cassidy Levy Kent, thank you so much for for joining us.
00:49:35.119 --> 00:49:37.039
Nick, thank you for uh pinch hitting.
00:49:37.280 --> 00:49:41.199
Again, I gotta throw in the baseball uh reference uh for those who are following.
00:49:41.920 --> 00:49:48.559
Um learn more about our work at prosperousamerica.org and be sure to find us on YouTube.
00:49:48.880 --> 00:49:54.320
Uh you can check us out for the big three on Apple, Spotify, and Google wherever you get to podcasts.
00:49:54.639 --> 00:49:54.880
Thank you.
00:00:15.599 --> 00:00:20.960
The film in your pocket and the solar panel on your neighbor's roof started the same way.
00:00:21.199 --> 00:00:27.519
As quartz refined into great powder called polysilicon, 99.999% pure.
00:00:27.679 --> 00:00:31.600
And roughly 93% of the world's supply of that powder now comes from China.
00:00:31.760 --> 00:00:39.280
Nearly half of the solar grade material comes from a single region, Xinjiang, where Washington says production runs on forced labor.
00:00:39.520 --> 00:00:44.799
Two of the technologies that will define this century pass through one gate, and Beijing is the gatekeeper.
00:00:44.960 --> 00:00:48.560
And this month, for the first time, America decided to push back on the gate itself.
00:00:49.439 --> 00:00:55.840
So welcome to the big three from the Coalition for a Prosperous America, where each week we break down the three biggest stories shaping U.S.
00:00:56.000 --> 00:00:58.240
trade, industrial policy, and the American economy.
00:00:58.560 --> 00:01:06.959
I'm here to Sikar, and this week I'm joined by Nick Ayakovella, CPA's Executive Vice President for Public Affairs and Communications, as Andrew is out this week.
00:01:07.280 --> 00:01:08.079
So let's get to it.
00:01:09.439 --> 00:01:15.680
So the big story this week is the administration has rolled on its uh Section 232 investigation into polysilicon.
00:01:16.000 --> 00:01:19.200
And the remedy goes further than any solar trade action before it.
00:01:19.599 --> 00:01:30.719
So we have a 15% national security tariff plus minimum import prices, a first for any 232 covering the whole supply chain from raw polysilicon to finished modules, and it lands on December 4th.
00:01:31.280 --> 00:01:38.000
Polysilicon is the material underneath every silicon chip and virtually every solar panel, and China has spent 15 years cornering the market.
00:01:38.400 --> 00:01:45.519
And today, what Washington did, how China built that corner, and whether this action can bring the industry home is what we'll be discussing.
00:01:46.079 --> 00:01:49.200
So our guest today has litigated this issue for over a decade.
00:01:49.439 --> 00:02:02.640
Tom Baleen is a partner at Cassidy Levy Kent and has represented American solar manufacturers in most of the major trade cases of that period, including the circumvention case and the court fight fight that ended the two-year tariff holiday that they were receiving.
00:02:03.439 --> 00:02:11.840
Last time Tom was on, we talked about Chinese solar firms angling for 45X tax credits through Hong Kong corporate structures, but now the fight is on the raw material itself.
00:02:12.080 --> 00:02:13.039
Tom, welcome back.
00:02:15.120 --> 00:02:16.240
Thanks for having me.
00:02:20.800 --> 00:02:24.159
First, why don't we start by talking about what Washington just did?
00:02:24.319 --> 00:02:26.479
So there's a lot of layers to this proclamation.
00:02:26.639 --> 00:02:28.800
There's the terrorists, the price floors, et cetera.
00:02:28.960 --> 00:02:34.240
Talk us through, you know, what you think, your some initial thoughts about this proclamation, why you think this is unique.
00:02:34.800 --> 00:02:47.280
Well, so you you said right away right up with that, that this is a first uh in a long time that we've seen something where um something like a minimum import pricing uh mechanism has been used.
00:02:47.439 --> 00:02:51.599
Uh in uh the trade world, it's not uh out of left field.
00:02:51.680 --> 00:02:54.080
It's actually been used in other contexts.
00:02:54.159 --> 00:03:02.080
But uh, as you know, we've talked about anti-dumping and countervailing duties in the past uh on this pod, and and I've explained how those those things work.
00:03:02.159 --> 00:03:08.000
And sometimes you can get what's called a suspension agreement in those cases where you can set a minimum import price.
00:03:08.159 --> 00:03:12.639
So the United States has used these to try to resolve trade frictions in the past.
00:03:12.800 --> 00:03:18.879
And so it's it's a it's a nice to have in a space, but it's not exactly, you know, uh a new wheel.
00:03:18.960 --> 00:03:20.159
It's reinventing the wheel.
00:03:20.240 --> 00:03:35.120
Uh the where it's done uh something new here that is different than in any other case is that it's looked at the entire supply chain and tried to really establish um uh what you would have as a differential within each step of the supply chain.
00:03:35.280 --> 00:03:57.840
And I think it's it's doing so in order to provide some certainty for people to come back to the United States, invest in making these products here, knowing that you're not going to have a situation where you put a business plan together assuming that the price in the market is going to stay at a certain level, only to have a surge of Chinese imports come in and crash those prices down, right?
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So, what the minimum import price does throughout the supply chain is basically provide some certainty for investment in the US, where you can actually build out a business case to invest in something that may not become operational in the next quarter, but eight quarters from now.
00:04:12.319 --> 00:04:16.319
So that's why it's it's particularly unique because of the expansive nature.
00:04:17.040 --> 00:04:25.839
Yeah, it seemed like you know the the imposition of the the price, the min the minimum import price that you know it does things that a straight tariff can't do.
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So maybe Tabia, you might have already kind of touched on this a little bit, but I think that that was a really kind of for me a signature takeaway of this proclamation.
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And maybe if you want to elaborate on that a little bit, the import of that.
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Yeah, for sure.
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So what what they're there's a couple of things that are going on here.
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So um, you know, with our special tariffs that we've had under AIPA, Section 232, Section 301, sometimes what they do is they actually incentivize a tariff cost sharing as between a foreign producer and the US importer, where, you know, I mean you're you and I have talked about this in the past, where, you know, in the initial China 301, you know, in Trump 1.0, what you saw was, you know, prices that were going up in in the normal course, all of a sudden we put in place Section 301 tariffs of 25%, those prices then all of a sudden drop by 25%.
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And it's clear that the Chinese were willing to take a bath to maintain U.S.
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market share and not increase prices, right?
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You can do that only for so long until it actually catches up to you.
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Um, that's sometimes what happens with these special tariffs.
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And so what we have in this circumstance is we have the tariff buffer, but we also have this minimum import price floor, which actually has some teeth to it because it basically says you have to be at a minimum import price of, let's say, on a cell, 22 cents per watt.
00:05:48.800 --> 00:06:04.399
Then you also have to certify that your first arm's length sale of that end product containing that cell, if it's if it's the cell itself, has to be at 22 cents a watt or higher, or the module that you're going to produce uh from that cell has to be at 38 cents per watt or higher.
00:06:04.480 --> 00:06:22.800
So it's basically setting in place a US market atmosphere where the expectation is on the commercial side, where people are buying these products from unrelated parties, you're going to have a market price war that basically sets that price low at that level.
00:06:22.959 --> 00:06:28.160
And what I think this is intending to do is, you know, everybody's trying to drive down costs.
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As you get to scale, you're going to be able to deal with cost increases because um you can deal with fixed costs on a per unit level if you get to scale, right?
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You can reduce those, you can drive them down.
00:06:39.920 --> 00:06:49.680
And so in an environment where you get more companies onshore here and getting scale in the US market, you're going to have a situation where US costs should be declining.
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Over the period of time, if you know that you can get your costs below what these minimum import price levels are, you have some margin built in there to compete with the imports.
00:07:00.319 --> 00:07:18.079
And so it does actually create a market opportunity for anybody who wants to invest because you could say, hey, if we can get our fixed costs down and we have to deal with some variable costs, of course, but if we can get our fixed costs down and get scale, we can actually be selling modules, you know, making a profit.
00:07:18.399 --> 00:07:27.519
You know, if we can get you know costs down to 33, 34 cents a watt, you're gonna be able to be, you know, the pole position for selling those modules in the U.S.
00:07:27.600 --> 00:07:27.839
market.
00:07:27.920 --> 00:07:28.720
And guess what?
00:07:28.879 --> 00:07:41.519
Not only do you have that adder, but you have the OBBA and the IRA uh tax benefits that that accrue because you've produced the good in the United States using non-fioc materials.
00:07:41.600 --> 00:07:54.000
And so it's it's really an opportunity that, you know, I think the Commerce Department is saying, you know, we're gonna get into this space, we're gonna create an industrial policy that actually generates onshoring activity.
00:07:54.079 --> 00:08:06.000
And if I can just bring it back to the baseline of the proclamation, I mean, when you look at the proclamation that the president's team put out right in the first paragraph, it identifies what this is all about, right?
00:08:06.399 --> 00:08:16.000
In the space of a decade and a half, and you make me feel old here because you know I was litigating these cases back, you know, when we first brought the first solar cell piece.
00:08:16.079 --> 00:08:31.120
I was in the government at the time in 2011, and it was a big deal as to whether we would even initiate the case because there was concern that China would immediately retaliate against our polysilicon production, which was the global supplier of polysilicon at the time.
00:08:31.199 --> 00:08:32.720
And what happened is they did.
00:08:32.879 --> 00:08:37.840
They basically put in draconian tariffs that hollowed out our polysilicon production.
00:08:38.159 --> 00:08:44.559
Well, polysilicon production is something well akin to um, you know, major league baseball, right?
00:08:45.039 --> 00:08:51.200
You want to be producing the best grade polysilicon that actually goes into the semiconductor industry.
00:08:51.440 --> 00:08:55.440
Every single time you're producing a batch of polysilicon, you want to hit a home run.
00:08:56.080 --> 00:08:56.480
Guess what?
00:08:56.639 --> 00:08:59.919
In baseball, if you hit 400, you're going to the hall of fame.
00:09:00.080 --> 00:09:02.879
And that's something somewhere that's happening with polysilicon producers.
00:09:02.960 --> 00:09:07.840
If you can get to 400 on the semi-grade, you know, you should be doing really well.
00:09:08.000 --> 00:09:09.600
You should be printing money.
00:09:10.000 --> 00:09:12.720
The problem is, what do you do with the other 60%?
00:09:13.360 --> 00:09:15.759
That 60% needs some place to go.
00:09:16.000 --> 00:09:19.440
Well, the 60% is actually a big deal when you think about it.
00:09:19.519 --> 00:09:34.960
And so having the ability to sell that here to and get uh uh and wafer making facilities that can come online now here, and then have the soul solar supply chain here to sell that 60% of the polystilicum production, that's a big deal.
00:09:35.039 --> 00:09:39.840
And that says the company is like the corneans, the hemlock, the vodkers of the world.
00:09:40.000 --> 00:09:44.799
Hey, you know, ramp up your production and continue producing polysilicum.
00:09:45.600 --> 00:09:54.639
I I love that you brought in baseball here because this is a perfect segue for for opportunity for me to question our our resident baseball player, Nick, um, to see if you had any questions.
00:09:54.879 --> 00:09:55.679
You see what I did there?
00:09:55.759 --> 00:09:56.879
That that was smooth, by the way.
00:09:56.960 --> 00:10:01.200
But Nick, did you I wanted to give you a chance to weigh in with questions or any comments you might have.
00:10:02.080 --> 00:10:07.519
Yeah, no, I uh I I'm I'm a washed up baseball player now who tries to play golf.
00:10:07.679 --> 00:10:23.679
But no, I think what Tom is saying, you know, is is really important to understand that uh the whole reason why this is such an important 232 and the framework that we've seen is it is it does encompass the entire sector.
00:10:23.840 --> 00:10:38.960
And when you look at poly in particular, uh you know, certainly they really tried to figure out what is the best way to accommodate this entire supply chain, acknowledging that the poly producers they can make you know chip grade poly, and that's phenomenal.
00:10:39.120 --> 00:10:53.759
Uh we really want a chip sector, but what do they do with this leftover piece when China has so dominated the global marketplace uh for solar grade polysilicon, not because they've outinnovated us or they're better companies.
00:10:53.919 --> 00:11:04.480
Um it's simply because we have allowed them to do it either through a lack of of enforcement or policy, uh and we've we've let them, you know, undercut our market and our producers.
00:11:04.799 --> 00:11:18.559
Uh so I think what's really smart here and and maybe uh you know, Tom, I mean you've spent over a decade, I think, you know, um, although you know he's he's still still looking, you know, very uh very you know very young.
00:11:18.639 --> 00:11:24.399
But but it's uh you've had you your experience in this sector uh is extensive.
00:11:24.639 --> 00:11:37.759
I mean, you've been in the fights with these companies on the front lines, um across multiple trade cases, you you've seen firsthand what the Chinese can do, uh how they've gotten around some of these loopholes.
00:11:39.279 --> 00:11:42.240
What really stands out to you in this one?
00:11:42.720 --> 00:12:02.799
I mean, I I know there's some concerns that we have around like the 120-day delay implementation, you know, we saw stockpiling during the Biden years with the moratorium, but you know, I I think on the whole, uh Under Secretary Kessler and his team, they really presented here the most comprehensive framework we've seen.
00:12:03.039 --> 00:12:10.240
Um and and you know, we've heard from other members this should be a model for other 232s, or you know, why didn't they do this for our sector?
00:12:10.399 --> 00:12:12.080
So what stands out the most to you?
00:12:12.159 --> 00:12:13.519
What do you think they really got right?
00:12:13.679 --> 00:12:14.879
What should we be watching for?
00:12:15.279 --> 00:12:22.399
Well, so let me start with the the first one, which uh, you know, I think is something that might not be as obvious.
00:12:22.720 --> 00:12:29.519
But they tried as hard as possible to get the market price to be at these levels.
00:12:29.679 --> 00:12:35.360
And by that I mean they have set the minimum import price standard as what it is.
00:12:35.519 --> 00:12:41.600
So that's that's the value that actually needs to be declared when you enter the merchandise into the United States.
00:12:41.679 --> 00:12:46.399
And if you're not at that level, what they've provided for is a specific tariff.
00:12:46.720 --> 00:13:00.159
And so when you think about it through the lens of what is the actual cost to me as the importer, so driving the cost elements, and and this is gonna be right up my here's uh line of thinking because I'm going right into economics, right?
00:13:00.240 --> 00:13:02.639
So, and this would be a great study to do.
00:13:02.960 --> 00:13:07.039
But you have a 15% that is applied on the entry value.
00:13:07.200 --> 00:13:17.200
And so intrinsically, as we just talked about with the special tariffs, when I think about offsetting any tariff impact, the first thing I think about is valuation.
00:13:17.440 --> 00:13:21.759
Could I reduce my entry value by a certain amount to offset the percentage?
00:13:22.000 --> 00:13:24.159
Well, guess what happens when you do it here?
00:13:24.399 --> 00:13:45.519
If you were to reduce the value below 22 cents per sell per watt for a sell uh to get away from the 3.3 cents that you would have to pay uh in the 15%, what you end up doing is actually adding an amount to get you back up to the 22 cents because they provided for a specific tariff that carries you up there.
00:13:45.679 --> 00:13:52.159
So let's say I reduce my sell import uh entered value to 20 cents per per watt.
00:13:52.480 --> 00:14:04.720
Well, all of a sudden, my actual tariff impact is five cents because I paid three cents for the 15% times the 20 cents, and then I have a two cent special tariff to get me back up to 22.
00:14:04.960 --> 00:14:10.799
And so by reducing my entry value, I'm worse off from an importer standpoint.
00:14:10.960 --> 00:14:17.840
So that's the first thing is that it's actually going to drive people to have to, you know, bring their entry values up.
00:14:18.000 --> 00:14:28.320
And that's actually gonna be an interesting proposition for some people because then you turn around as the importer of record and you say, okay, I paid this much for the product.
00:14:28.559 --> 00:14:31.759
I'm gonna need to turn some kind of profit in the US, right?
00:14:31.840 --> 00:14:41.600
And so they're gonna have to turn around and sell it to the first unrelated supplier for maybe a half a cent or a full cent higher per watt, even though the related party cost of production is much lower.
00:14:41.759 --> 00:14:48.960
So that's the first thing is that that the specific tariff actually has bite to it that I don't think people uh it realize.
00:14:49.120 --> 00:14:56.799
I mean, it it there the world is is changing with that specific tariff because it's it's an absolute value of a cent each time you go down.
00:14:56.879 --> 00:14:58.159
It's not a percentage figure.
00:14:58.320 --> 00:14:59.120
So that's the first thing.
00:14:59.279 --> 00:15:08.879
The second thing is they have employed a certification regime that has been lacking in a lot of the suspension agreement context that I've talked to you about uh before.
00:15:09.120 --> 00:15:14.240
Uh for years we had a suspension agreement with Mexico in uh trade in tomatoes.
00:15:14.320 --> 00:15:18.720
Uh it's a uh a case that our firm has been involved in uh for a number of years.
00:15:18.799 --> 00:15:31.759
And when Assistant Secretary Kessler was actually assistant secretary of enforcement and compliance, we were often in there with our clients and explaining to him why suspendure agreement was working, and he would say, Well, help me understand that because we've set a minimum import price.
00:15:31.840 --> 00:15:32.720
Like, what's the problem?
00:15:32.879 --> 00:15:40.639
And we'd say, Listen, come with us to the LA terminal market, and you'll be able to see wholesale tomato prices well below that minimum import price.
00:15:40.799 --> 00:15:41.600
So he gets it.
00:15:41.759 --> 00:15:49.120
What he understands is that it can't just be on the import side because you know people are gonna, you know, move money around and do whatever.
00:15:49.279 --> 00:15:56.240
What they've created is this certification regime that requires you to certify to selling to the person related party.
00:15:56.320 --> 00:15:56.879
And guess what?
00:15:56.960 --> 00:16:06.480
If you don't certify or don't have the certifications, they're not just gonna apply penalties like we saw with the people who violated the tariff moratorium in solar.
00:16:06.639 --> 00:16:09.519
What they're going to do is they're gonna say, you can no longer import.
00:16:09.919 --> 00:16:11.759
That's as draconian as it gets.
00:16:12.159 --> 00:16:18.240
And so this is like the first time that I've seen them go to that level of a penalty, right?
00:16:18.399 --> 00:16:26.000
It you know, people would be fine, you know, taking a penalty of, you know, the full value of the merchandise they're found to be committing customs fraud.
00:16:26.240 --> 00:16:36.480
You commit some sort of violation here, which is simply not keeping a certificate or not supplying the certificate to CVP, you can lose your importation privileges, which means no more US market access.
00:16:36.639 --> 00:16:42.480
So those are the two things that I would call out as particularly um impactful with this one.
00:16:42.639 --> 00:16:46.799
And let me just comment really quickly on the four-month rollout period.
00:16:47.600 --> 00:17:01.440
You know, as somebody who lived through the Biden tariff moratorium, which was like the worst policy decision that probably was ever made with regard to you know dealing in trade, um, because it it set a red line of when it was going to end.
00:17:01.519 --> 00:17:04.000
So everybody was racing towards that finish line.
00:17:04.160 --> 00:17:11.519
Um, we ended up having, you know, stockpile of merchandise here in the US that far exceeded deployment of this stuff.
00:17:11.759 --> 00:17:14.000
You know, I I represent US companies.
00:17:14.160 --> 00:17:19.279
I had Chinese companies calling uh left, right, and center saying, can't you do something about it?
00:17:19.359 --> 00:17:23.279
Because we're getting hammered on price because everybody is bringing stuff in.
00:17:23.440 --> 00:17:27.920
So, like when the Chinese are saying the price is too low, that's when you know there's a real problem.
00:17:28.319 --> 00:17:34.799
Um but with this four-month one, they've actually put in a provision of referencing anti-stockpiling.
00:17:34.960 --> 00:17:50.240
And what I what why that is important is during the pendency of this 232 investigation, because of the uncertainty as to when it would drop, the trade was actually sort of holding back on projects.
00:17:50.400 --> 00:18:03.119
There, there you know, there was almost like this this reticence to bring in a lot of merchandise to try to to try to do something because the the the financing wasn't there, people were waiting on the sidelines to see how this one one shook out.
00:18:03.200 --> 00:18:11.359
Because there's a lot of information going on in in the atmosphere is that is it gonna be 100% tariffs, is it gonna be this, that, or you know, is there gonna be shortage of things?
00:18:11.599 --> 00:18:13.759
Um all of this was going on.
00:18:13.839 --> 00:18:18.400
And so what you had was actually almost a flattening of importation behavior.
00:18:18.480 --> 00:18:25.920
You had new entrants come in and like so there are spikes of things, but it it wasn't like you know, you would see this like crest of a wave.
00:18:26.160 --> 00:18:39.200
And so, because of that, I think what they've actually done is looked at those data and said, well, we're gonna be able to see stockpiling because if we see an uptick that wasn't there before, that's gonna be stockpiling.
00:18:39.279 --> 00:18:51.039
And so I think if you're an importer who is going to be, you know, trying to race to get this stuff in before December uh fourth, I think there's a real problem that you're gonna be facing that they're gonna be looking at uh, you know, very clearly.
00:18:51.119 --> 00:18:59.119
And again, that that that sort of Damocles over every importer's neck here about you can no longer import.
00:18:59.519 --> 00:19:06.960
You know, some of these companies don't just import cells and modules, they're importing raw materials to you know produce here in the US.
00:19:07.119 --> 00:19:10.559
If you can't import that stuff, I mean that's a real risk.
00:19:10.720 --> 00:19:18.000
And I think companies are gonna take, you know, a second to say, hold on, like let's be let's be mindful about what this all means.
00:19:18.720 --> 00:19:20.480
Yeah, that's a word fit.
00:19:22.000 --> 00:19:38.799
Yeah, I mean I think I think we got a good handle, I think, in that first segment about you know what this uh action does, and it finally seems like it's got some teeth, it's got some enforcement um i involved in it, and I think it we understand why, because of all the different ways that you know these policies can be circumvented.
00:19:39.119 --> 00:19:45.279
So I thought it would be good to maybe transition over to the second segment, which was how Beijing, you know, cornered the material in the first place.
00:19:45.440 --> 00:19:51.920
So just to lay up just to give a lay of the land, China has produced like 93% of the world's polysilicon last year.
00:19:52.079 --> 00:19:54.559
Nine of the ten largest producers are Chinese.
00:19:54.880 --> 00:20:02.640
One of their companies alone can make roughly 910,000 tons a year, whereas America's largest producer might make up like 35,000.
00:20:02.799 --> 00:20:06.880
Um and this is kind of a playbook that we've covered, which is pretty familiar to us at CPA.
00:20:07.039 --> 00:20:09.759
We talk about how China has built these choke points.
00:20:09.920 --> 00:20:27.920
Um, but you know, as an economist and the things that I learned in school, we talked about like comparative advantage and how, oh, you know, you just have natural endowments in one thing and you trade and all it's kind of it looks great on a textbook, but but this to me isn't necessarily about a story about like, you know, just um you know, natural endowments or comparative advantage.
00:20:28.000 --> 00:20:30.720
It seems like largely, of course, the pot product of policy.
00:20:30.799 --> 00:20:35.839
I mean, there's a reason why China is able to undercut, you know, any you know, seller in the US.
00:20:36.000 --> 00:20:37.920
Um, because we are making this stuff.
00:20:38.079 --> 00:20:48.240
We do have you know hemlock semiconductor, um, we do have uh Vokker, you know, and and these are the these kind of policies that we have are are needed to kind of keep them uh competitive.
00:20:48.400 --> 00:20:54.079
But but talk maybe a little bit about how Beijing accumulated the the resources to kind of build this choke point up.
00:20:54.160 --> 00:20:56.000
And we'll start there on the policy front.
00:20:56.480 --> 00:21:08.799
Yeah, so uh I mean the thing that China has that we don't have is they've got a single party system where the head of the government gets to determine what they do and what they focus in on.
00:21:08.960 --> 00:21:29.920
And so when you go back in time, um, you know, as China entered the modern um world and was led into the World Trade Organization, which meant we brought down all the tariffs worldwide on China, um, and they came into the fold of international trade, they developed what are called five-year industrial plans.
00:21:30.000 --> 00:21:37.920
And these five-year industrial plans would identify specific sectors of the economy that they wanted to um engage in.
00:21:38.559 --> 00:21:46.079
And every single one of those industrial plans, if you read them, indicates a desire to be dominant worldwide.
00:21:46.400 --> 00:21:54.960
And that I think is a different animal than anybody else has ever seen in modern history of being dominant worldwide.
00:21:55.119 --> 00:22:05.039
I mean, when you think about like being dominant worldwide, I immediately go into a World War II thing, like dominance in the skies, like it is battle cry type of thing, right?
00:22:05.759 --> 00:22:16.079
This coming in the context of economic policy, I look at it as battle cry type of thing there too, which was we are coming out into the world and we're going to take advantage of this.
00:22:16.240 --> 00:22:26.400
So if you go back, I think into 2006 is when you first start to see polysilicon and the polysilicon sectors enter into these five-year plans.
00:22:26.640 --> 00:22:38.079
And so what you have over the period of time is that there's a message from the top that says these are the areas that we're going to focus in on, and we're going to do everything we can to support them.
00:22:38.240 --> 00:22:39.839
Well, what do they do to support it?
00:22:40.079 --> 00:22:45.759
Well, if you want to build a factory in China, you can get land for free from some of these industrial zones.
00:22:45.920 --> 00:22:46.880
They'll give it to you for free.
00:22:46.960 --> 00:22:47.759
You don't pay rent.
00:22:47.839 --> 00:22:48.960
You pay no rent.
00:22:49.039 --> 00:22:50.160
You don't have to buy the land.
00:22:50.319 --> 00:22:51.359
You get it for free.
00:22:51.599 --> 00:22:55.519
Some will say, okay, you come into our industrial zone, we'll give you electricity for free.
00:22:55.680 --> 00:22:58.000
And they can do that because it's all coal-fired power.
00:22:58.160 --> 00:23:04.000
So really, really cheap stuff, really, really dirty stuff, the stuff that's causing pollutants in the air constantly.
00:23:04.240 --> 00:23:09.200
Ironically, they're saying, don't blame us because we're doing all this green energy stuff.
00:23:09.279 --> 00:23:12.319
Yeah, well, you're building it with the most disgusting material possible.
00:23:12.880 --> 00:23:22.400
Um and so what they did was they were able to do that to help prop up and start their industry, but then that wasn't enough because they couldn't compete with US know-how.
00:23:22.559 --> 00:23:32.160
So what they did was um over the course of time, they started to take on things like uh chip manufacturing, which was sort of like the downstream of poly.
00:23:32.319 --> 00:23:38.559
And the polysilicon producers here in the US had to sell into the Chinese markets and make those chips.
00:23:38.880 --> 00:23:42.559
Well, all of a sudden there was a hundred percent tariff on U.S.
00:23:42.640 --> 00:23:43.599
polysilicon.
00:23:43.680 --> 00:23:46.640
And so we've lost the biggest market in China.
00:23:46.720 --> 00:24:01.279
So they basically did stand up their stuff, make somebody, you know, available for the know-how, learn US ways, then protect the market by cutting up the US and then creating a built-in market structure for themselves.
00:24:01.440 --> 00:24:13.119
And the way that they do that is that that's the most, you know, I don't know if you want to say diabolical, but I I I'll go there, is that they want to have the entire supply chain be dictated by their companies.
00:24:13.279 --> 00:24:27.119
And the reason why I say it's diabolical is because if you go back to 2018, you had a period of time where you had new technologies in cell production for generating more power from the sun's rays.
00:24:27.200 --> 00:24:30.000
And these were, you know, sort of like moving in parallel.
00:24:30.079 --> 00:24:33.839
There was like the baseline stuff, and then there was like the more advanced stuff.
00:24:34.079 --> 00:24:40.000
Well, China saw what was happening and they said, well, hold on a second, like we're gonna pump the brakes on this thing.
00:24:40.160 --> 00:24:51.039
And what they did was they went to the um uh equipment manufacturers that stopped making the equipment to make those specific size cells for that technology.
00:24:51.279 --> 00:24:57.200
You need to start making equipment for bigger wafer making for bigger cells for a different technology.
00:24:57.440 --> 00:25:06.880
And so they basically changed the entire trajectory of the marketplace by having the ability to make the equipment to do the cell production.
00:25:07.119 --> 00:25:10.400
Like that's where it's so like mind-blowing, right?
00:25:10.480 --> 00:25:11.839
And how do they do that?
00:25:12.079 --> 00:25:17.599
They all get in a room and talk, and they say, You're gonna do this, and you're gonna do that, and you're gonna do this.
00:25:17.839 --> 00:25:38.319
If you go back two years where we had this massive glut of production in the in the world market of solar, you had basically China having weekly meetings with the major companies saying, You're gonna curtail production this week, you're gonna stand down production, you're not gonna hire, you're not gonna produce, you're not gonna do this.
00:25:38.559 --> 00:25:44.000
And then the other thing is they have the wherewithal to be able to stand up the demand sector.
00:25:44.160 --> 00:25:53.440
So even though they were telling people to curtail production, they basically were installing, you know, all this sol all the solar fields, you know, all throughout China.
00:25:53.680 --> 00:25:57.680
But I'll tell you what, hardly any of them are actually connected to the grid.
00:25:57.920 --> 00:26:06.400
And they're not connected to the grid on purpose because they're basically saying we're gonna find somewhere to put all this stuff to have you know production to be able to stand up this.
00:26:06.480 --> 00:26:16.240
But we're not gonna undermine our coal-fired power plant because that's what drives our competitiveness in every other sector, including, you know, aluminum and steel and be able to undercut the world prices there.
00:26:16.400 --> 00:26:21.119
So, you know, this is a it's a really interesting um history here.
00:26:21.279 --> 00:26:34.160
I mean, I think we could probably spend hours talking about those five-year plans, but it really does go back to you know baseline 2001 when China was all led into the WTO and and the world market was open to it.
00:26:34.960 --> 00:26:50.799
Yeah, and I I guess, you know, what oh I'm sorry, Nick, did you want to jump in or maybe well I I think just one of the most interesting points about this this is so different from what we're used to seeing, you know, in the US and and maybe even in European markets.
00:26:51.359 --> 00:27:06.559
Uh but it's really important for policymakers to understand that you know when we're designing policy in the U.S., whether it's trade policy, industrial policy, it it's always with you know the mindset that we want these private companies to be profitable.
00:27:07.200 --> 00:27:12.480
You know, and and if they if they're driving profitability, they're able to invest, they're able to grow.
00:27:13.039 --> 00:27:17.359
Uh with the Chinese, they don't care about profitability at all.
00:27:17.680 --> 00:27:20.960
Uh they simply care about capturing global market share.
00:27:21.359 --> 00:27:32.640
And I think it's why a lot of our policies have failed to not necessarily fail to make an impact, but certainly failed in the past to deliver the kind of results that were promised of them.
00:27:33.119 --> 00:27:43.279
Um I think what is is so unique about this new polyproc, and you know, maybe as we we wrap, we should think about what what can we judge its success by.
00:27:43.759 --> 00:27:53.440
Uh but it's clear that that commerce and the Trump administration with this one is really thinking about we're recognizing that China doesn't care about profitability.
00:27:53.599 --> 00:27:57.039
They'll drive the price down as much as possible to have access to the U.S.
00:27:57.279 --> 00:27:57.599
market.
00:27:58.160 --> 00:28:05.599
And they responded with a framework that I think accommodates that in a completely new way, you know, to keep them out of the U.S.
00:28:05.759 --> 00:28:08.160
market where they can really undervalue product.
00:28:08.480 --> 00:28:13.119
Uh because as Tom said, if they undervalue the product, they get hit with a specific tariff.
00:28:13.200 --> 00:28:14.480
That's very punitive.
00:28:15.039 --> 00:28:23.039
Um, if if they import at the MIP level, you know, then I think we have to judge, you know, are the MIP levels at the right spot?
00:28:23.200 --> 00:28:24.240
Is everything working?
00:28:24.480 --> 00:28:40.720
But you know, maybe just as we were looking towards, you know, the future of this, um, and I do think, you know, this will be heavily judged if it's successful or not, because there's been so much policy around solar uh in particular on trade.
00:28:40.960 --> 00:28:50.880
Um what are things, you know, we obviously represent the entire supply chain, you know, of manufacturers at CPA from poly all the way through to module.
00:28:51.200 --> 00:28:55.920
Uh I think when we talked with Commerce, you know, they really wanted to see still and wafer investment.
00:28:56.079 --> 00:29:02.799
But you know, as as someone who's been in this sector longer than we have, you know, Tom, I mean, what what are you looking for to see?
00:29:03.039 --> 00:29:08.480
You know, is is there certain trade things you're looking for on import levels or pricing or investments?
00:29:08.640 --> 00:29:09.519
Is it all of it?
00:29:09.680 --> 00:29:11.200
You give us a a little preview.
00:29:11.599 --> 00:29:18.319
Yeah, so the first thing I'm looking for is is the minimum import price that's carried through to the market price going to stick?
00:29:18.559 --> 00:29:24.240
And by that I mean the first concern that I have stems from my history in in ag.
00:29:24.880 --> 00:29:27.680
And it's you know, that tomatoes example, right?
00:29:27.920 --> 00:29:32.720
Let's say I caught the guy with the tomatoes selling them below the minimum import price.
00:29:33.039 --> 00:29:38.400
Well, next week what he's gonna do is he's gonna be selling tomatoes bundled with green peppers.
00:29:38.559 --> 00:29:42.799
And I'm not gonna be able to show where the offsets are there.
00:29:43.039 --> 00:30:12.400
And that's I think the major concern I have is that you know, we need to be thinking about what does enforcement look like if we all of a sudden see a Chinese company that acquires a installation or distribution or um uh uh a developer, and they can basically bundle to the first unrelated party the whole can caboodle, right?
00:30:12.480 --> 00:30:22.880
And all of a sudden you go from you know 38 cents per watt for a module down to like a blended price with installation and everything like that that is far below that.
00:30:23.039 --> 00:30:26.559
And I'm not sure how visible that will be in order to be enforced.
00:30:26.720 --> 00:30:33.200
And so that's an element that I think you know, baseline we've gotta we'd gotta be talking about enforcement there.
00:30:33.519 --> 00:30:38.960
The second thing that I think is uh uh uh you know, is this going to be successful?
00:30:39.279 --> 00:30:43.839
Is really kind of close the donut hole in the supply chain.
00:30:44.000 --> 00:30:48.240
And the biggest donut hole right now is Engiproing and wafer making.
00:30:48.640 --> 00:31:02.640
And people might not think this is particularly special because all you're doing is you're taking the polysilicon, you're putting it into like a lab structure, you're growing this beautiful ingot, and then you're using a laser slicer to slice that into wafers.
00:31:02.720 --> 00:31:06.400
And you know, you'd sort of like shrug and say, okay, like how hard is that?
00:31:06.640 --> 00:31:09.920
I mean, from the technology perspective, it's not, it's the machinery.
00:31:10.079 --> 00:31:26.160
Where it gets really hard in the United States is that we have a regulatory environment that doesn't like a lot of water usage that you know is not necessarily going into consumption by you know animals or people uh or things like that.
00:31:26.400 --> 00:31:30.160
And and wafer making and ingot growing takes a lot of water.
00:31:30.240 --> 00:31:31.839
It also takes a lot of energy.
00:31:32.079 --> 00:31:37.200
And the environment that we're in with new AI data centers, you know, those energy costs are going up.
00:31:37.359 --> 00:31:56.000
And so from a US policy perspective, you know, are the differentials where you've got$100 per kg equivalent for wafer to 22 cents per watt for cell, is that delta significant enough to incentivize the wafer making to come online?
00:31:56.160 --> 00:31:58.319
Because that's really the biggest problem that we have right now.
00:31:58.480 --> 00:32:02.720
We can't really control our own destiny because you've got to go offshore for wafers.
00:32:02.880 --> 00:32:14.640
And just as I said with regards to the equipment uh example from 2018, you also had wafer changes over the course of the 2010s where China was constantly changing the wafer sizes, which dictate the cell sizes.
00:32:14.880 --> 00:32:22.720
So if we can get away from having to rely on others for the wafers, that's where I think this policy can can also be successful.
00:32:22.960 --> 00:32:27.119
And the final thing I'll say, I mean, does this go far enough?
00:32:27.359 --> 00:32:38.480
The supply chain for a bill of materials to produce uh a solar module, you know, a solar cell, includes a lot of materials that we probably want to have produced here in the U.S.
00:32:38.640 --> 00:32:44.400
I mean, I think the people who you know produce extruded aluminum, like they produce great things.
00:32:44.480 --> 00:32:48.720
I mean, you bought a boat in Florida, like half of the stuff there is extruded aluminum.
00:32:48.880 --> 00:32:52.079
I mean, we want to have the ability to make some really nice stuff here.
00:32:52.240 --> 00:32:53.920
Well, solar frames are in that space.
00:32:54.000 --> 00:32:54.480
And guess what?
00:32:54.640 --> 00:33:02.319
Steel is actually a great uh framing technology too, with with uh some of the stuff that you know the companies are doing in the steel sector.
00:33:02.400 --> 00:33:05.599
And so is that an area that we should be talking about protecting?
00:33:05.759 --> 00:33:11.759
The other thing is, you know, things like um uh paste and uh electromaterial inverters.
00:33:11.839 --> 00:33:19.440
I mean, there's a lot of stuff that goes into the bill of material that are things that are sensitive and go into technology elsewhere.
00:33:19.519 --> 00:33:21.599
And so it's something that we could be thinking about.
00:33:21.680 --> 00:33:25.440
You know, China is the dominant supplier of silver paste in the entire world.
00:33:25.759 --> 00:33:27.440
Could we have silver paste production here?
00:33:27.599 --> 00:33:27.920
I don't know.
00:33:28.000 --> 00:33:38.240
I mean, we've got the ability through mining to have that, including if our relationship with Canada gets resolved this week uh with certain trade deals, there's opportunities there for silver paste.
00:33:38.319 --> 00:33:43.599
It's almost like I'd like to have a Fortress North America idea with respect respect to these types of articles.
00:33:43.680 --> 00:33:51.039
And that's where I'm wondering if a version 2.0 of this, if we start to see things work well, includes more of that build material.
00:33:51.839 --> 00:33:53.279
Yeah, that's a great point.
00:33:53.759 --> 00:34:03.440
We we actually have the aluminum extruders, and uh they they used to make these frames for the solar sector, you know, years ago.
00:34:03.599 --> 00:34:10.639
Uh and and we saw that, you know, their their ability to provide this um profitably, you know, where they weren't being undercut.
00:34:10.960 --> 00:34:17.280
We saw that go away fairly quickly once, you know, we we saw the trade protection sort of degraded on the aluminum side.
00:34:17.440 --> 00:34:29.440
But I think there's there's a lot of interesting things you said there, and and really getting into something, maybe a little foreshadowing of something that we've been talking about, which is there's all this energy generation happening.
00:34:29.599 --> 00:34:36.239
You know, it's not just the solar panel or the natural gas turbine, but it's all the different pieces that go into it, the copper wiring.
00:34:36.639 --> 00:34:40.960
Um, you know, could we see some type of energy generation 232?
00:34:41.280 --> 00:34:44.559
There's a huge boom happening in the AI space.
00:34:44.800 --> 00:34:50.079
Uh we've seen, you know, uh huge demand for more gigawatts to the grid.
00:34:50.239 --> 00:34:54.400
Uh I think we're importing like 80-some percent of the equipment to do energy generation.
00:34:54.480 --> 00:34:54.559
Uh.
00:34:54.800 --> 00:34:57.440
And you know, why wouldn't we want to make more of that here?
00:34:57.920 --> 00:35:07.760
Uh and I think the the really the huge benefit to all that is we start to see this web of like interconnectedness where the industrial sectors, you know, overlap.
00:35:08.159 --> 00:35:10.800
You know, it's not just solar, but it's aluminum, it's steel.
00:35:10.880 --> 00:35:18.880
You know, a company like um, you know, NextPower, you know, formerly Next Tracker, right, an incredible company building a whole bunch of stuff.
00:35:19.039 --> 00:35:27.360
You know, they're a technology, they're a steel company, um, you know, they're building systems for utility scale solar, but they use all of our members' materials.
00:35:27.440 --> 00:35:30.880
You know, I think they they purchase steel from our member companies.
00:35:31.039 --> 00:35:35.280
Um these are the kinds of companies that are benefiting from this type of policy, right?
00:35:35.360 --> 00:35:38.960
It's not just the solar manufacturer, the polyproducer.
00:35:39.119 --> 00:35:41.840
You know, so the jobs we created really spread out.
00:35:41.920 --> 00:35:43.440
Um, well, definitely that.
00:35:43.519 --> 00:35:52.559
I mean, one of the things that you often hear from opponents of of solar um uh is that you know it only works when the sun's shine.
00:35:53.440 --> 00:35:57.360
Yeah, that's true, up until you get to battery storage.
00:35:57.679 --> 00:36:07.039
Because battery storage is the key that unlocks the ability for solar to be a 24-hour supply source, right, from an electricity perspective.
00:36:07.199 --> 00:36:18.800
And and what you see at a lot of these new bills is that actually battery storage is in fact being you know built into the whole premise of what's going on there.
00:36:18.880 --> 00:36:34.480
And that actually makes a lot of sense just from an energy policy perspective, because just like in in solar, you know, net gas, you'll see fluctuations over the course of a day hourly, you'll see fluctuation in the price of net gas.
00:36:34.639 --> 00:36:41.039
Well, that does drive some impact through the supply chain.
00:36:41.280 --> 00:36:49.679
And if you got to battery storage at scale here in the US, which I I would like to, I think that's like the next frontier of what we need to do here.
00:36:49.840 --> 00:37:04.559
Um, you you get the benefits of having these sources be a little bit more constant because you can draw from those at these larger uh electricity-intensive uh programs like an AI data center.
00:37:04.719 --> 00:37:18.400
Um, you know, you can you can have solar on the roof, you can have that augmented with NAT gas, and it all goes into a battery storage facility that's like literally right next door to you, and you can draw power through the day, through the night.
00:37:18.559 --> 00:37:19.519
And guess what?
00:37:19.679 --> 00:37:30.480
I I guarantee you, if we got there, everybody who was looking at their electricity bills now from the consumer perspective would say, Holy cow, my electricity bills are going down.
00:37:31.039 --> 00:37:35.440
Because we would then have we would then have it all make sense through VS Disas.
00:37:37.440 --> 00:37:38.079
Yeah.
00:37:39.360 --> 00:37:42.559
I was thinking, I was thinking like, so we've covered a lot of ground.
00:37:42.639 --> 00:37:49.760
I wanted to move us to the the third piece, and and Tom, you kind of have kind of um mentioned a little bit raising the question about like will this work?
00:37:49.840 --> 00:38:07.920
And I wanted to step back for a second and think about, you know, from from my vantage point, I think about a lot of the policies that have been uh implemented to try to, you know, try to limit China's rise in this in this space because of you know whether it's aiding dumping, countervailing duties that, you know, and and you know, you dated yourself a little bit.
00:38:08.000 --> 00:38:09.280
I d I'll date myself a little bit.
00:38:09.360 --> 00:38:25.679
I was I was at the ITC during the time when a lot of these trade cases were happening, a lot of these AD C B D duties coming out, and happened to see just like how China had a was really adept at circumventing these rules and just upping uh uprooting production and moving it to a different jurisdiction, all of a sudden it's in Southeast Asia.
00:38:25.920 --> 00:38:34.239
And then even seeing, you know, you mentioned uh the the I think it was the uh the two-year holiday uh on Southeast Asian panels that we then allowed uh to happen.
00:38:34.320 --> 00:38:37.440
And there's been some policy inconsistencies that we've had.
00:38:37.760 --> 00:38:40.079
So I get back to the question of like, will this work?
00:38:40.239 --> 00:39:00.239
How important is it to number one just be on the same page, whether whether whatever administration we have in place, um the consistency of focus on this issue, and then also just uh appropriately leveraging the tools that we have to try to um really just kind of limit this kind of activity, this kind of malfeasance that we're seeing from China.
00:39:00.800 --> 00:39:03.920
So let me just put it really simply, no loopholes, right?
00:39:04.079 --> 00:39:07.039
Like once you create a loophole, that loophole will be exploited.
00:39:07.119 --> 00:39:12.079
And and Mary, you may remember this from your time uh at the ICD.
00:39:12.239 --> 00:39:20.960
We for years we didn't have uh a safeguard uh because of the way that the World Trade Organization reacted to the way we applied the safeguard measures.
00:39:21.119 --> 00:39:32.800
And when when the Trump administration said, enough, we're not gonna have you know six unnamed bureaucrats in Geneva tell us how to interpret our laws, uh, we all of a sudden have the ability to bring safeguard cases again.
00:39:33.039 --> 00:39:36.719
The solar safeguard was one that was an opportunity.
00:39:36.960 --> 00:39:42.960
And by that I mean, you know, there there was the ability to instill some discipline in the market.
00:39:43.119 --> 00:39:46.559
Uh safeguard remedies have a lot of different benefits to them.
00:39:46.639 --> 00:39:52.960
There it was a a tariff-free quota as well as as a tariff, and it was universal in application for the most part.
00:39:53.199 --> 00:40:15.039
The exceptions were, you know, for developing countries, and there we didn't really have a lot of the whack-a-mole problems until a couple of years into the into the safeguard when all of a sudden Cambodia, you know, known solar powerhouse Cambodia, came onto the scene uh not because they were really good at the technology, but they were excluded from the safeguard as a as a developing country, quote unquote.
00:40:15.360 --> 00:40:21.199
The next thing that happened, though, was that we excluded from the safeguard what were called five-facial panels.
00:40:21.280 --> 00:40:25.119
So this is where you generate electricity on both sides of the panel.
00:40:25.599 --> 00:40:32.639
That was pushed by uh big energy companies who said, this this technology doesn't exist in the United States.
00:40:32.960 --> 00:40:45.280
Well, had anybody picked up the phone to call one of the longest running US producers in auxin solar, oxen would say, here's three different projects we just did on bifacial panels.
00:40:45.360 --> 00:41:06.480
And so once they excluded bifacial panels with this pitch by the energy company saying they couldn't get it, um, all of a sudden you had a situation where the Chinese were essentially painting the bifacial panels black in order to put them on a roof and still call them bifacial panels, even though they were only like on a roof generating electricity from one side of the panel.
00:41:06.719 --> 00:41:10.960
And so this the summary of all this is no loopholes.
00:41:11.119 --> 00:41:12.000
We can't have them.
00:41:12.159 --> 00:41:18.239
And so, like the reason for this 232, why it's so great, is that A, no developing country loopholes.
00:41:18.400 --> 00:41:29.519
So you're not gonna go and be able to go to you know where China's going now in Africa to you know set up a module making facility using all Chinese bill material and then ship it to the US.
00:41:29.679 --> 00:41:33.280
That ain't gonna happen now to avoid these the the this measure.
00:41:33.679 --> 00:41:36.960
B, you're you you we're not gonna exclude any product, right?
00:41:37.039 --> 00:41:41.360
You could see here this is modules writ large, cells writ large.
00:41:41.440 --> 00:41:43.679
Like nothing is called out as an exemption.
00:41:43.840 --> 00:41:52.800
And I think if you're you know it if folks who are listening to this come to DC and they go to the White House and they mention the word exclusion, it's like saying a four-letter word to your grandmother.
00:41:52.960 --> 00:41:55.440
Like you're gonna get you're gonna get slapped for doing it, right?
00:41:55.760 --> 00:41:57.679
We're not talking about exclusions anymore.
00:41:57.840 --> 00:41:59.840
We're having these universal tariffs.
00:42:00.000 --> 00:42:10.800
And so those two things on their own should address some of the things that we've had happen in the past that undermine the remedies that have been put in place.
00:42:11.199 --> 00:42:18.880
Lastly, though, I think what is so important is that we have a continuity in policy.
00:42:19.119 --> 00:42:34.639
You know, in the United States, for better or worse, we have lots of process for people to say, I don't want this facility in my backyard, I don't want you to build this new facility, I need to get permission to get this type of electricity, this type of water.
00:42:34.800 --> 00:42:37.360
It takes time to get these things up and running.
00:42:37.599 --> 00:43:02.559
To have this going into place in December of 2026, and then if we have a change in administration, and all of a sudden in the middle of you know 20 2030 or or after we have all this stuff pulled out from under us, you know, we're gonna be in a worse-off position because there's gonna be companies who are gonna say, you fooled me once and yet I still made an investment, and then you fooled me again.
00:43:02.800 --> 00:43:21.440
And I think that's where you know I think the risk is is that you know, in 2029, you know, and early 2029, if there is a switch in administration, there's going to be this impulse, uh, especially in solar for some reason, this impulse to side with like the installation side of the business.
00:43:21.679 --> 00:43:33.440
And I'm hopeful that we have a full calendar year of 2027 and all of 2028 to prove everybody wrong that having minimum import prices is not going to be ruinous for the industry.
00:43:33.519 --> 00:43:35.519
It's not going to put people out of jobs.
00:43:35.679 --> 00:43:40.079
In fact, what I'd say is it's going to give more opportunity for more jobs.
00:43:40.239 --> 00:43:43.119
It's going to provide more opportunity for investment in the United States.
00:43:43.280 --> 00:43:57.519
Some of the some of the money is that sitting on the sidelines is going to come into the sector and say, let's put, let's, let's put a solar uh cell facility in in one of these one of these uh states that that we can we can rely on to be supportive.
00:43:57.679 --> 00:44:02.880
Let's put in a wafer making facility because we Got uh you know the ecosystem set up.
00:44:02.960 --> 00:44:10.559
And you know, I think from there, if we have that happen, what I would hope is that the people who are all for green energy look around and say, you know what?
00:44:10.800 --> 00:44:12.960
This is green energy through and through.
00:44:13.119 --> 00:44:19.519
It's not dirty coal, it's not international shipping, it's not benefiting from forced labor policies.
00:44:19.679 --> 00:44:29.599
It is truly, you know, getting back to what America created in the 1950s when we first came up with this technology and then mastered it in the 2000s before China stole it from us.
00:44:30.800 --> 00:44:31.360
Yeah, yeah.
00:44:31.679 --> 00:44:39.840
At the top of the show, I called Beijing the gatekeeper of this material, and August 6th, the the proc was like the first action aimed at what we call the gate itself.
00:44:40.000 --> 00:44:43.760
So the whole chain is being tackled at once instead of one case at a time.
00:44:43.920 --> 00:44:51.760
And Tom, I think before we let you go, I wanted to ask you real quick, what's the one thing you'd want our listeners to take away about this action?
00:44:53.519 --> 00:45:01.119
So over the course of a number of years I've been arguing for tariffs on solar cells and modules.
00:45:01.440 --> 00:45:04.719
And I have received a lot of hate mail.
00:45:04.960 --> 00:45:14.800
I've been told that I am um in the pocket of big oil, that I want nothing more than, you know, uh a dirty life.
00:45:14.880 --> 00:45:25.280
Uh I want nothing more than, you know, three centigrade of increase to the global temperature when, you know, one and a half is is accepted as as too much.
00:45:25.599 --> 00:45:43.519
Um what I would say is what I'm in favor of is having the ability to control our own destiny, having good paying jobs in areas of the country that have been forgotten in some respects and looked down upon in other respects.
00:45:43.760 --> 00:45:46.159
And there is dignity in work.
00:45:46.320 --> 00:46:04.800
Um what I will tell you is when I travel to visit clients in all sectors and I get to go to a factory, it's one of the best parts of my job, honestly, because I get to sit and talk with people who I may never come across in my life in the normal course of the day.
00:46:05.039 --> 00:46:07.599
Um, you know, they're working really hard jobs.
00:46:07.679 --> 00:46:09.920
I'm lucky to be in an office in Washington, D.C.
00:46:10.239 --> 00:46:17.679
But when we sit down and talk about it, what I hear from them is um we just want a level playing field.
00:46:17.840 --> 00:46:21.920
If you give us a level playing field, we're gonna work just as hard.
00:46:22.000 --> 00:46:24.639
We're gonna actually make better products because we care.
00:46:24.800 --> 00:46:25.440
And you know what?
00:46:25.599 --> 00:46:32.960
We want to be able to walk down the street and see that solar farm that you know the municipality is putting in be US-made product.
00:46:33.119 --> 00:46:42.480
I want to drive down the highway and I want to see the cranes that I help build or that are helping build infrastructure here be US made cranes and not warren cranes.
00:46:42.559 --> 00:46:55.519
Like there's something about the dignity of putting your hands on something and making something and then seeing it in reality and being able to look at your kid and feel good about what you're providing for them and saying that's what that's what dad and mom made today.
00:46:55.679 --> 00:46:56.639
Like that's what we did.
00:46:56.800 --> 00:47:11.360
And that's where I what I would say to everybody who's listening is that you know, if we make it here, we're be better off for it, health-wise, work-wise, personality-wise, professional-wise, like we're all gonna be better for it.
00:47:11.440 --> 00:47:12.159
And you know what?
00:47:12.320 --> 00:47:22.800
If we can all sit down and understand that um, you know, if we have jobs in this country and we're making things in this country, we'll be able to have dignity and look at each other.
00:47:22.960 --> 00:47:29.519
I guarantee you that all of us who have kids are gonna look at our kids and say, we've definitely done right by you.
00:47:29.599 --> 00:47:31.519
And that's where I come out at this.
00:47:32.719 --> 00:47:34.000
Yeah, I love that.
00:47:34.239 --> 00:47:34.719
I love that.
00:47:34.880 --> 00:47:38.719
Yeah, you got me fired up to do get back to my desk and do some work this evening.
00:47:38.880 --> 00:48:01.920
And I'll tell you what, uh, just as a real quick uh re reminder, uh, I don't think that the folks you know in in China can necessarily look at the the labor force in in Xinjiang and and and say that sort of pride and the dignity uh that you just mentioned and the importance of that because like they're they're robbing their workforce of dignity, you know, and all in the name of getting a lower price, you know, polysilicon and all the other products that they're putting out there.
00:48:02.079 --> 00:48:04.400
Um so you know, I had to throw that out.
00:48:05.119 --> 00:48:06.719
Isn't that something that's nice to have here too?
00:48:06.880 --> 00:48:08.960
Like let's let's let's take one step back.
00:48:09.199 --> 00:48:12.320
We've created a minimum import price for the United States, okay?
00:48:12.559 --> 00:48:17.039
What that means is that you no longer have to force somebody to do labor.
00:48:17.199 --> 00:48:18.000
You can pay them.
00:48:18.239 --> 00:48:21.599
You can actually pay them more when it's the dirtiest stuff in the world.
00:48:21.840 --> 00:48:43.679
And so for all the people on the left who want to, you know, have you know, say that this president goes too far in this space, goes, you know, way down the line too far in trade, is not, you know, is not thinking about it, you know, there's a person who is being forced to do work to build this stuff in the worst conditions.
00:48:43.840 --> 00:48:49.360
I mean, there are some of the the materials that go into this are sometimes really nasty materials.
00:48:49.679 --> 00:48:59.280
And wouldn't it be great knowing that you can sell this product for 22 cents a watt for a cell or 38 cents a watt for a module, and be able to say, you know what?
00:48:59.440 --> 00:49:08.719
I could pay that person a couple more uh RMB per hour because, you know, all of a sudden I've got this space because the market is correcting itself.
00:49:08.880 --> 00:49:13.039
We're no longer in this unfair market where I also need to be unfair to my people.
00:49:13.199 --> 00:49:18.880
And so, you know, uh you bring up a really good point that there are there's hope, I guess is what I would say with this.
00:49:18.960 --> 00:49:22.800
And that that may be the best thing to say about the T32 program.
00:49:23.360 --> 00:49:27.039
Yeah, you're not just in vet you're not just paying a wage, you're investing in communities.
00:49:27.119 --> 00:49:30.559
I mean, if there's a it's a multiplier effect to all of this, it's so critical.
00:49:30.719 --> 00:49:34.960
Um, Tom Boleyn, thank you of Cassidy Levy Kent, thank you so much for for joining us.
00:49:35.119 --> 00:49:37.039
Nick, thank you for uh pinch hitting.
00:49:37.280 --> 00:49:41.199
Again, I gotta throw in the baseball uh reference uh for those who are following.
00:49:41.920 --> 00:49:48.559
Um learn more about our work at prosperousamerica.org and be sure to find us on YouTube.
00:49:48.880 --> 00:49:54.320
Uh you can check us out for the big three on Apple, Spotify, and Google wherever you get to podcasts.
00:49:54.639 --> 00:49:54.880
Thank you.
