A swath of recommendations calls for more investments, new supply chains and less reliance on other countries for crucial goods.WASHINGTON — The Biden administration on Tuesday planned to issue a swath of actions and recommendations meant to address supply chain disruptions caused by the coronavirus pandemic and decrease reliance on other countries for crucial goods by increasing domestic production capacity. More
Global shortages of many goods reflect the disruption of the pandemic combined with decades of companies limiting their inventories.In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them. More
OREFIELD, Pa. — From his office in an old barn on a turkey farm, David Jaindl watches a towering flat-screen TV with video feeds from the hatchery to the processing room, where the birds are butchered. Mr. Jaindl is a third-generation farmer in Pennsylvania’s Lehigh Valley. His turkeys are sold at Whole Foods and served at the White House on Thanksgiving. More
The administration learned of what appeared to be “serious violations” of labor rights, it said, and is using a new tool in the North American trade deal to seek a review.WASHINGTON — The Biden administration announced on Wednesday that it was asking Mexico to review whether labor violations had occurred at a General Motors facility in the country, a significant step using a new labor enforcement tool in the revised North American trade deal.The administration is seeking the review under the novel “rapid response” mechanism in the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement and took effect last summer. Under the mechanism, penalties can be brought against a specific factory for violating workers’ rights of free association and collective bargaining.The administration “received information appearing to indicate serious violations” of workers’ rights at the G.M. facility, in Silao in the central state of Guanajuato, in connection with a recent vote on their collective-bargaining agreement, the Office of the United States Trade Representative said.The vote was stopped last month amid accusations that the union at the facility had tampered with it, according to news reports. Mexico’s Labor Ministry said on Tuesday that it had found “serious irregularities” in the vote and ordered that it be held again within 30 days.The updated North American trade agreement required Mexico to revamp its labor system, and the country overhauled its labor laws in 2019. Sham collective-bargaining agreements known as protection contracts, which are reached with employer-dominated unions, are widespread in the country. Now unions are holding votes to affirm the existing agreements.G.M. said it would cooperate with Mexico’s Labor Ministry and the U.S. government.Henry Romero/ReutersIn a statement, Katherine Tai, the U.S. trade representative, said the announcement on Wednesday “shows the Biden-Harris administration’s serious commitment to workers and a worker-centered trade policy.”“Using U.S.M.C.A. to help protect freedom of association and collective-bargaining rights in Mexico helps workers both at home and in Mexico, by stopping a race to the bottom,” she said, using the initials for the trade deal. “It also supports Mexico’s efforts to implement its recent labor law reforms.”In a statement, General Motors said that it believed it had no role in the alleged labor violations and that it had asked a third-party firm to review the matter. The company, which makes Chevrolet Silverado, Chevrolet Cheyenne and GMC Sierra pickup trucks at the Silao facility, said it would cooperate with Mexico’s Labor Ministry and the U.S. government.“General Motors respects and supports the rights of our employees to make a personal choice about union representation and any collective bargaining on their behalf,” the statement said. “G.M. condemns violations of labor rights and actions to restrict collective bargaining.”In announcing its request for a review by Mexico, the Biden administration avoided striking an adversarial tone with the Mexican government.Ms. Tai praised the government “for stepping in to suspend the vote when it became aware of voting irregularities,” adding, “Today’s action will complement Mexico’s efforts to ensure that these workers can fully exercise their collective-bargaining rights.”On Monday, the A.F.L.-C.I.O. and other groups filed a complaint under the rapid response mechanism in which they alleged labor violations at the Tridonex auto parts plants in the Mexican city of Matamoros, across the border from Brownsville, Texas.The Biden administration will review that complaint, an official in the trade representative’s office said. It could then ask Mexico to conduct a review of that matter akin to the one it is seeking of the G.M. facility.Oscar Lopez More
President Biden says slowing climate change will create jobs. Tension between unions and environmentalists shows it’s not so simple.Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.“I was doing cartwheels,” said Ms. Fahy, who represents the area. But she was soon caught in a political bind.A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.Since President Biden’s election, Democrats have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden told Congress last month.On Tuesday, his administration gave final approval to the nation’s first large-scale offshore wind project, off Martha’s Vineyard in Massachusetts, again emphasizing the jobs potential.But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.That tension could become apparent as the White House fleshes out its climate agenda.“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.But much of the supply chain for renewable energy and other clean technologies is in fact abroad. Nearly 70 percent of the value of a typical solar panel assembled in the United States accrues to firms in China or Chinese firms operating across Southeast Asia, according to a recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.As a result, labor leaders are pressing the administration to attach strict conditions to the subsidies it provides for green equipment. “We’re going to be demanding that the domestic content on this stuff has to be really high,” said Thomas M. Conway, the president of the United Steelworkers union and a close Biden ally.The experience of New York reveals how delicate these debates can be once specific jobs and projects are at stake.Patricia Fahy, a New York State legislator, met opposition from environmentalists and wind industry officials over efforts to press developers to use locally made parts.Mohamed Sadek for The New York TimesA slip at the Port of Albany was created for ships with oversize cargo from overseas, including components for the wind industry.Mohamed Sadek for The New York TimesLate last year, the Communications Workers of America began considering ways to revive employment at a General Electric factory that the union represents in Schenectady, N.Y., near Albany. The factory has shed thousands of employees in recent decades.Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”In early February, the union produced a draft of a bill that would ask developers like Equinor to buy their wind equipment from manufacturers in New York State “to the maximum extent feasible” — not just towers but other components, like blades and nacelles, which house the mechanical guts of a turbine. Ms. Fahy, a member of the Assembly, and State Senator Neil Breslin, a fellow Democrat from the Albany area, signed on as sponsors.Environmentalists and industry officials quickly raised concerns that the measure could discourage developers from coming to the state.“So far, Equinor has gone above and beyond what any other company has done,” said Lisa Dix, who led the Sierra Club’s campaign for renewable energy in New York until recently. “Why do we need more onerous requirements on companies given what we got?”Ms. Dix and other clean-energy advocates had worked with labor unions to persuade the state that construction jobs in offshore wind should offer union-scale wages and representation. And New York’s system for evaluating clean-energy bids already awarded points to developers that promised local economic benefits.Ms. Reynolds, the head of the environmental and industry coalition in New York, worried that going beyond the existing arrangement could make the cost of renewable energy unsustainable.“If it became bigger and more noticeable on electric bills, the common expectation is that political support for New York’s clean-energy programs would erode,” she said.The communications workers sought to offer reassurance, not entirely successfully. “I said to them, ‘We’re trade unionists: We ask for everything, the boss offers us nothing, and then we make a deal,’” Mr. Master said. “‘But I do think there’s no reason why turbines should be coming from France as opposed to Schenectady.’”The final language, a compromise negotiated with the state’s building trades council and passed by the Legislature in April, allows the state to award additional points in the bidding process to developers that pledge to create manufacturing jobs in the state, a slight refinement of the current approach. (It also effectively requires that workers who build, operate or maintain wind and solar plants either receive union-scale wages or can benefit from union representation.)While the law included a “buy American” provision for iron and steel, the state’s energy research and development agency, known as NYSERDA, can waive the requirement.The agency’s chief executive, Doreen Harris, said she was generally pleased that the existing approach remained intact and predicted that the state would have blade and nacelle factories within a few years.Some analysts agreed, arguing that most offshore wind equipment is so bulky — often hundreds of feet long — that it becomes impractical to ship across the Atlantic.“There’s a point at which importation of all goods and services doesn’t make economic sense,” said Jeff Tingley, an expert on the offshore wind supply chain at the consulting firm Xodus.Importing parts has made economic sense for Britain, which had installed more offshore wind turbines than any other country by the start of this year but had made little of the equipment.Suzie Howell for The New York TimesBut that has not always reflected the experience of the United Kingdom, which had installed more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.“Even with the U.K. being the biggest market, the logistics costs weren’t big enough to justify new factories,” said Alun Roberts, an expert on offshore wind with the British-based consulting firm BVG Associates.A 2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment, and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.” More
The A.F.L.-C.I.O. and other groups are seeking to make use of a new enforcement mechanism in the updated North American trade deal.WASHINGTON — The A.F.L.-C.I.O. and other groups plan on Monday to file a complaint with the Biden administration over claims of labor violations at a group of auto parts factories in Mexico, a move that will pose an early test of the new North American trade deal and its labor protections. More
U.S. factories are humming again. But the recovery’s speed has left many employers scrambling for workers or for parts.Matt Guse would hire a dozen machinists — if only he could find them.The owner of MRS Machining, a maker of precision metal parts in rural Augusta, Wis., Mr. Guse finds business is rebounding so quickly as the pandemic’s effect eases that his 47-worker shop is short-handed.“I’ve turned down a million dollars’ worth of work in the last two weeks,” he said. “Doing that, it’s hard to go to bed at night when you put your head to the pillow. I have open capacity, but I need more people.”After a sharp downturn when the pandemic hit last year, factories are humming again. But the recovery’s speed has left employers scrambling. Despite huge layoffs — manufacturing employment initially dropped by 1.4 million — some companies find themselves desperate for workers.In other cases, shortages of parts like semiconductors and supply chain disruptions have made orders hard to fill and created fresh uncertainty.“It was a lot easier to turn the lights out than to ramp up,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago. “Manufacturers weren’t prepared for a surge of demand in goods. They’ve been caught a bit flat-footed.”The manufacturing recovery signals a turning point, with the Biden administration putting a fresh focus on increasing factory jobs, especially in areas like semiconductors and electric vehicles. That growth will be crucial if the overall economy is to expand rapidly in the months ahead.The Commerce Department reported Monday that orders for durable goods — like cars and appliances — rose half a percentage point in March, prompting Barclays to lift its tracking estimate of economic growth for the first quarter to 1.4 percent, or 5.6 percent at an annualized rate.On Thursday, the government will release its initial reading on economic growth in the first three months of the year, and manufacturing is expected to be among the bright spots. The consensus of analysts polled by Bloomberg is that the report will show gross domestic product expanded by 1.7 percent, up from 1.3 percent.At one point, factory production was down substantially because of the pandemic, but it should return to pre-Covid-19 levels by the third quarter of this year, according to Chad Moutray, chief economist for the National Association of Manufacturers.“We’re seeing gangbuster levels of orders,” he said. “But the sector has a lot of challenges, like a rise in raw material costs, supply chain disruptions, logistics bottlenecks and worker shortages.”At MRS Machining, Mr. Guse said, spot shortages of items like steel and metal plate are a constant issue. “Quotes for material goods from suppliers are usually good for three to six months,” he said. “Now it’s a matter of hours.”As at many factories, the work pays well, starting at $18 to $20 an hour and rising to around $30. But the most skilled workers, like machinists, remain hard to find, according to Mr. Guse.“We’re getting applicants because people are moving out of Minneapolis and Chicago and looking to live in a more rural environment,” he said.Despite the good news at MRS, rebuilding overall factory employment is a challenge, said Scott Paul, president of the Alliance for American Manufacturing, a policy group representing manufacturers and the United Steelworkers.President Biden is fighting a long-term trend. Nearly 12.3 million Americans work in factories. Two decades ago, that figure stood at just over 17 million.“We feed the companies whose products go into infrastructure,” said Kathie Leonard, the chief executive of Auburn Manufacturing, which makes heat- and fire-resistant fabrics.Yoon Byun for The New York TimesFiberglass fabric before it is processed in a vertical oven, where it will be heated at 1,300 degrees Fahrenheit to caramelize so it won’t smoke when reaching high temperatures.Yoon Byun for The New York TimesAfter the last few economic downturns — the falloff in growth following the Asian financial crisis of the late 1990s; the slump after the attacks of Sept. 11, 2001; and the Great Recession — manufacturing failed to recover the lost jobs.To be sure, the sector has made up a good amount of ground after losing nearly 1.4 million positions in the first months of the pandemic, but employment remains about 515,000 jobs short of where it was in February 2020.Some experts question why policymakers focus so much on production when most Americans work in service industries that have been gaining jobs over the years and offer better growth prospects. But manufacturing is one of the few paths to a middle-class life for the two-thirds of American adults who lack a college degree.The average hourly wage of manufacturing workers is $29.15, while workers in leisure and hospitality, another field that draws people with less education, earn $17.67 an hour.Mr. Paul hopes that Mr. Biden’s plan to revitalize American manufacturing as part of his larger infrastructure effort will bear fruit.“He’s pretty serious about some form of industrial policy,” Mr. Paul said, citing the administration’s call for action in making products like semiconductors and electric vehicles. “It may be possible for Biden to do what no president has since manufacturing began its job decline and reverse the losses.”The administration’s blueprint includes $50 billion in funding for investments in chip manufacturing and research as well as $174 billion in spending to advance electric vehicles.The $2 trillion plan, with its focus on rebuilding roads and bridges as well as the electric grid, could help companies like Auburn Manufacturing of Maine, said its chief executive, Kathie Leonard.“Customers are struggling to meet launch timelines and production targets,” said Christie Wong Barrett, chief executive of MacArthur Corporation, a maker of labels and decals outside Flint, Mich. Brittany Greeson for The New York TimesMacArthur makes labels and decals like those showing tire pressure or indicating vehicle identification numbers. Its business was hard hit a year ago when the pandemic forced auto plants to shut down.Brittany Greeson for The New York Times“We feed the companies whose products go into infrastructure,” said Ms. Leonard, describing the heat- and fire-resistant fabrics Auburn makes at two factories in central Maine, about a half-hour from Portland. “The infrastructure plan holds promise for companies like us.”“You have to work at being an optimist,” she said. “We’re not going to hire 25 people, but maybe five. We need to hire a technical director, fabricators, and we need staff to help with e-commerce.”The semiconductor shortages are a headache for Christie Wong Barrett, chief executive of MacArthur Corporation, a maker of labels and decals outside Flint, Mich. She said orders had been delayed by car companies — her major customers — that couldn’t find enough of the chips they needed to keep cars coming off the assembly lines.“Customers are struggling to meet launch timelines and production targets,” she said. “Orders are either reduced in volume or delayed. It trickles down to different suppliers, and we’re just getting a haircut across the board.”MacArthur’s business had already been damaged when auto plants closed a year ago amid the pandemic lockdowns, cutting off demand for labels and decals like those showing tire pressure or indicating vehicle identification numbers.Ms. Barrett was able to pivot and supply products for medical customers, averting all but a handful of layoffs for her work force of 50. She remains optimistic, despite the current logistical backups.“It’s a horrible disruption right now, but I’m anticipating a strong recovery,” she said. “We never made major cuts, and as automotive production starts to recover more, I expect to hire several more people in the coming months.” More
President Biden’s vow to work with China on issues like climate change is clashing with his promise to defend human rights.WASHINGTON — President Biden has repeatedly pledged to work with China on issues like climate change while challenging Beijing on human rights and unfair trade practices.But those goals are now coming into conflict in the global solar sector, presenting the Biden administration with a tough choice as it looks to expand the use of solar power domestically to reduce the United States’ carbon dioxide emissions.The dilemma stems from an uncomfortable reality: China dominates the global supply chain for solar power, producing the vast majority of the materials and parts for solar panels that the United States relies on for clean energy. And there is emerging evidence that some of China’s biggest solar companies have worked with the Chinese government to absorb minority workers in the far western region of Xinjiang, programs often seen as a red flag for potential forced labor and human rights abuses.This week, Mr. Biden is inviting world leaders to a climate summit in Washington, where he is expected to unveil an ambitious plan for cutting America’s emissions over the next decade. The administration is already eyeing a goal of generating 100 percent of the nation’s electricity from carbon-free sources such as solar, wind or nuclear power by 2035, up from only 40 percent last year. To meet that target, the United States may need to more than double its annual pace of solar installations.That is likely to be an economic boon to China, since the United States still relies almost entirely on Chinese manufacturers for low-cost solar modules, many of which are imported from Chinese-owned factories in Vietnam, Malaysia and Thailand.China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, a raw material that most solar panels use to absorb energy from sunlight. Nearly half of the global supply comes from Xinjiang alone. In 2019, less than 5 percent of the world’s polysilicon came from U.S.-owned companies.“It’s put the Democrats in a hard position,” said Francine Sullivan, the vice president for business development at REC Silicon, a polysilicon maker based in Norway with factories in the United States. “Do you want to stand up to human rights in China, or do you want cheap solar panels?”The administration is increasingly under pressure from influential supporters not to turn a blind eye to potential human rights abuses in order to achieve its climate goals.“As the U.S. seeks to address climate change, we must not allow the Chinese Communist Party to use forced labor to meet our nation’s needs,” Richard L. Trumka, the president of the A.F.L.-C.I.O., wrote in a letter on March 12 urging the Biden administration to block imports of solar products containing polysilicon from the Xinjiang region.China’s hold over the global solar sector has its roots in the late 2000s. As part of an effort to reduce dependence on foreign energy, Beijing pumped vast amounts of money into solar technology, enabling companies to make multibillion-dollar investments in new factories and gain market share globally.China’s boom in production caused the price of panels to plummet, accelerating the adoption of solar power worldwide while forcing dozens of companies in the United States, Europe and elsewhere out of business.A solar equipment factory in China’s Jiangxi Province in January. China’s hold over the global solar sector has its roots in the late 2000s, when Beijing began pumping vast amounts of money into solar technology.CHINATOPIX, via Associated PressIn the past few years, Chinese polysilicon manufacturers have increasingly shifted to Xinjiang, lured by abundant coal and cheap electricity for their energy-intensive production.Xinjiang is now notorious as the site of a vast program of detention and surveillance that the Chinese government has carried out against Muslim Uyghurs and other minority groups. Human rights groups say the Chinese authorities may have detained a million or more minorities in camps and other sites where they face torture, indoctrination and coerced labor.In a report last year, Horizon Advisory, a consultancy in Washington, cited Chinese news reports and government announcements suggesting that major Chinese solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar had accepted workers transferred with the help of the Chinese government from impoverished parts of Xinjiang.Jinko Solar denied those allegations, as did the Chinese government. Zhang Longgen, a vice chairman of Xinjiang Daqo — a unit of one of the companies cited by Horizon Advisory — said that the polysilicon plants were not labor intensive, and that the company’s workers were freely employed and could quit if they wanted, according to Global Times, a Chinese Communist Party-owned newspaper. The report said that only 18 of the 1,934 workers at Xinjiang Daqo belonged to ethnic minorities, and that none were Uyghur.The other companies did not respond to requests for comment.Experts have had difficulty estimating how many laborers may have been coerced into working in Chinese solar facilities given restrictions on travel and reporting in Xinjiang. Many multinational companies have also struggled to gain access to the region’s factories to rule out the risk of forced labor in their supply chains.Mark Widmar, the chief executive of First Solar, a solar panel maker based in the United States, said exposure to Xinjiang was “the unfortunate reality for most of the industry.”“How the industry has evolved, it’s made it difficult to be comfortable that you do not have some form of exposure,” he said. “If you try to follow the spaghetti through the spaghetti bowl and really understand where your exposure is, that’s going to be tough.”The revelations have attracted attention from lawmakers and customs officials, and prompted concerns among solar investors that the sector could be destined for tougher regulation.Under the Trump administration, American customs agents took a harder line against products reportedly made with forced labor in Xinjiang, including a sweeping ban on cotton and tomatoes from the region. Those restrictions have forced a reorganization of global supply chains, especially in the apparel sector.The Biden administration has said it is still reviewing the Trump administration’s policies, and it has not yet signaled whether it will pursue other bans on products or companies. But both Mr. Biden and his advisers have insisted that the United States plans to confront China on human rights abuses in Xinjiang.A spokeswoman for the National Security Council said that the draconian treatment of Uyghurs “cannot be ignored,” and that the administration was “studying ways to effectively ensure that we are not importing products made from forced labor,” including solar products.Congress may also step in. Since the beginning of the year, the House and Senate have reintroduced versions of the Uyghur Forced Labor Prevention Act, which would assume that imports from Xinjiang were made with forced labor and block them from American ports, unless the importer showed proof otherwise. The House version of the bill singles out polysilicon as a priority for enforcement.The legislation has broad bipartisan support and could be included in a sweeping China-related bill that Democrats hope to introduce this year, according to congressional staff members.Amid the threat of new restrictions, the Solar Energy Industries Association, a trade group, has led an effort to help solar companies trace materials in their supply chain. It has also organized a pledge of 236 companies to oppose forced labor and encouraged companies to sever any ties with Xinjiang by June.Some Chinese companies have responded by reshuffling their supply chains, funneling polysilicon and other solar products they manufacture outside Xinjiang to American buyers, and then directing their Xinjiang-made products to China and other markets.Analysts say this kind of reorganization is, in theory, feasible. About 35 percent of the world’s polysilicon comes from regions in China other than Xinjiang, while the United States and the European Union together make up around 30 percent of global solar panel demand, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.John Smirnow, the general counsel for the Solar Energy Industries Association, said most solar companies were already well on their way toward extricating supply chains from Xinjiang.A high-security facility that is believed to be a re-education camp in the Xinjiang region of China in 2019. President Biden and his advisers have said that they plan to confront China on human rights abuses in Xinjiang.Greg Baker/Agence France-Presse — Getty Images“Our understanding is that all the major suppliers are going to be able to supply assurances to their customers that their products coming into the U.S. do not include polysilicon from the region,” he said.But it is unclear if this reorganization will quell criticism. Episodes of forced labor have also been reported in Chinese facilities outside Xinjiang where Uyghurs and other minorities have been transferred to work. And restrictions on products from Xinjiang could spread to markets including Canada, Britain and Australia, which are debating new rules and guidelines.Human rights advocates have argued that allowing Chinese companies to cleave their supply chains to serve American and non-American buyers may do little to improve conditions in Xinjiang and have pressed the Biden administration for stronger action.“The message has to be clear to the Chinese government that this economic model is not going to be supported by governments or businesses,” said Cathy Feingold, the director of the A.F.L.-C.I.O.’s International Department.Chinese companies are also facing pressure from Beijing not to accede to American demands, since that could be seen as a tacit criticism of the government’s activities in Xinjiang.In a statement in January, the China Photovoltaic Industry Association and China Nonferrous Metals Industry Association condemned “irresponsible statements” from U.S. industries, which they said were directed at curbing Xinjiang’s development and “meddling in Chinese domestic affairs.”“It is widely known that the ‘forced labor’ issue is in its entirety the lie of the century that the United States and certain other Western countries have concocted from nothing,” they said.On Monday, Secretary of State Antony Blinken warned that the United States was falling behind China on clean energy production.But bringing solar manufacturing back to the United States could be a challenge, analysts said, given the time needed to significantly bolster American production, and it could also raise the price of solar panels in the short term.The United States still has a handful of facilities for manufacturing polysilicon, but they have faced grim prospects since 2013, when China put retaliatory tariffs on American polysilicon. Hemlock Semiconductor mothballed a new $1.2 billion facility in Tennessee in 2014, while REC Silicon shut its polysilicon facility in Washington in 2019.China has promised to carry out large purchases of American polysilicon as part of a trade deal signed last year, but those transactions have not materialized.In the near term, tensions over Xinjiang could be a boon for the few remaining U.S. suppliers. Ms. Sullivan said some small U.S. solar developers had reached out to REC Silicon in recent months to inquire about non-Chinese products.But American companies need the promise of reliable, long-term orders to scale up, she said, adding that when she explains the limited supply of solar products that do not touch China, people become “visibly ill.”“This is the big lesson,” Ms. Sullivan added. “You become dependent on China, and what does it mean? We have to swallow our values in order to do solar.”Chris Buckley More
