And Chinese Solar Tariffs It Looks To Be!

SolarWorld and a coalition of U.S. manufacturers of crystalline silicon photovoltaic cells scored a victory of sorts in their fight against Chinese competitors today as the U.S. Commerce Department, in a preliminary ruling, ordered duties ranging from 2.9 to 4.73 percent on imports from China.

These countervailing duties, intended to offset what the U.S. determined to be unfair government subsidies provided to Chinese manufacturers, are small—small enough, in fact, for U.S. opponents of duties to claim a partial victory of their own. But this is just Act I in the drama. There’s a second, ongoing aspect to the case as well: the allegation that Chinese companies are selling their products in the United States at below cost. A preliminary decision on possible antidumping duties, which could add significantly to the penalties the Chinese companies would have to pay, is due in May.

image via Shutterstock

In its announcement today [PDF], the Commerce Department said Suntech had received a preliminary subsidy rate of 2.90 percent, with Trina Solar at 4.73 percent and all others at 3.61 percent. The department also clarified the scope of its investigations, finding that they cover “not only imports of solar cells produced in China and solar modules/panels produced in China from Chinese-made solar cells, but also imports of solar modules/panels produced outside of China from solar cells produced in China.”

Under the ruling, the Chinese companies will now have to post bonds or cash deposits on their imports of solar cells and modules until a final decision is made in June. And because the U.S. earlier ruled that a surge in Chinese imports since SolarWorld filed its trade petition in October constituted “critical circumstances,” these duties would be applied retroactively to December 2011.

The complaint against the Chinese solar industry was brought by seven U.S. solar manufacturers, led by the Hillsboro, Ore.-based American unit of the German company SolarWorld AG. The companies said Chinese exports to the United States rose more than 300 percent from 2008 to 2010, and then skyrocketed in 2011, with exports in the month of July alone exceeding those from all of 2010. The group said the stunning ramp-up in exports was due to Chinese government subsidies and dumping margins “well in excess of 100 percent.”

For months SolarWorld was the only named member of the Coalition for American Solar Manufacturing (CASM), but in recent weeks two other companies—MX Solar USA of New Jersey and Helios Solar Works of Wisconsin—have revealed themselves. And, notably, when it responded to today’s ruling CASM didn’t quote SolarWorld USA’s head man Gordon Brinser, as has been its custom, but instead cited top officials at the two other named companies.

“Today’s announcement affirms what U.S. manufacturers have long known: Chinese manufacturers have received unfair and WTO-illegal subsidies,” said Steve Ostrenga, chief executive officer of Helios Solar Works.  “We appreciate the Commerce Department’s hard work in bringing these subsidies to light, and we look forward to addressing all of China’s unfair trade practices in the solar industry.”

1 Comment

  • Reply March 21, 2012

    Steve Heis

    Good overview on the subject. The US industry should stop trying to fight this trade war with China and start focusing in research and better business models to avail itself from the proximity with the american market which the chinese will never have.

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