A new US law targeting forced labor in China’s Xinjiang region is having a major impact on trade flows between China and the United States.
For example, Chinese solar panels and other equipment to generate solar energy have been piling up on the US border since the law was passed. That report analysts from investment bank Roth Capital.
In June, the Uyghur Forced Labor Prevention Act came into effect in the US. The law prohibits US companies from financing forced labor in China’s Xinjiang region. Human rights groups estimate that at least a million Uyghurs and other Muslim minorities are locked up in “re-education camps” in Xinjiang. Beijing strongly denies those allegations. China insists the camps are vocational training centers.
According to Roth Capital, solar panels and solar equipment with capacities totaling more than 3 gigawatts have been held by U.S. Customs since the law was enacted. This could rise to 9 to 12 gigawatts by the end of the year. Also, many Chinese manufacturers have stopped exporting solar panels and equipment to the US.
Keeping the solar panels will likely make it more difficult for the US to expand renewable energy capacity after the historic climate bill passed last week. The country is the world’s second-largest solar energy market but relies heavily on imports. China, by far the largest solar market, dominates the global supply chain, with Xinjiang being a key manufacturing region.
