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U.S. Boosts Duties on China Wind Energy as Trade Talks Open

U.S. Boosts Duties on China Wind Energy as Trade Talks Open

Ratcheting up trade tensions with China, the U.S. increased import duties on wind turbine towers produced by Chengxi Shipyard Co. and CS Wind Corp. as economic talks between the two nations opened in Washington.

The Commerce Department yesterday set final punitive tariffs on the products from China and Vietnam. The rates were higher than preliminary tariffs announced earlier this year to counter government subsidies and to prevent the goods from being sold in the U.S. below production costs, a practice known as dumping.

“The final results are an important step in remedying the material injury already suffered by the U.S. industry and will force the Chinese and Vietnamese producers to compete fairly,” Alan Price, an attorney with Wiley Rein LLP in Washington, said in a statement. Price represents the U.S. manufacturers that brought the case against the foreign producers, including Broadwind Energy Inc. of Naperville, Illinois.

The decision coincided with the start of two days of trade and economic talks between U.S. and Chinese officials. Tensions between the world’s two largest economies have risen within the past year over government support for clean-energy products, including solar cells and wind towers.

The department set anti-dumping duties of 47.59 percent on wind-towers from Chengxi Shipyard and 44.99 percent for Titan Wind Energy Suzhou Co., both based in China. The rate for Titan Wind was more than double its preliminary rate of 20.85 percent, announced in July. The steel towers support the turbines and engines used by power companies.

Anti-Dumping

The Chinese unit of South Korea-based CS Wind, along with Guodian United Power Technology Baoding Co. and Sinovel Wind Group Co., both based in China, received anti-dumping rates of 46.38 percent, also higher than their preliminary levels. All other Chinese producers and exporters of the goods received anti-dumping rates of 70.63 percent. Actual rates will be about 11 percentage points lower due to accounting adjustments.

U.S. anti-subsidy duties for the Chinese goods will be 21.86 percent for CS Wind and 34.81 percent for Titan. Other producers and exporters received an anti-subsidy rate of 28.34 percent, up from the preliminary tariff announced May 30.

Sinovel jumped by 10 percent, the most since Jan. 13, 2011, its first day of trading in Shanghai, and closed 4.1 percent higher at 5.29 yuan. Titan rose 1 percent to 14.03 yuan in Shenzhen trading.

Lowered Rates

The Commerce Department also announced anti-dumping penalties of 51.50 percent for CS Wind’s Vietnamese unit, and 58.49 percent for other producers in that country. The rates are slightly lower than the preliminary tariffs set earlier this year.

Chinese and Vietnamese imports of wind-towers account for about 25 percent of the total U.S. market, according to an Aug. 3 report from Bloomberg New Energy Finance.

Joining Broadwind in the complaint were Fergus Falls, Minnesota-based Otter Tail Corp.’s DMI Industries, Katana Summit LLC, headquartered in Ephrata, Washington, and a unit of Dallas- based Trinity Industries Inc. Major producers of wind-energy gear include General Electric Co. of Fairfield, Connecticut, and Siemens AG of Munich.

The U.S. last year imported about $222 million worth of utility-scale wind towers from China, and $79 million from Vietnam, according to the Commerce Department. During the first five months of this year, the U.S. imported $269 million in towers from China, according to Bloomberg New Energy Finance.

Neither the Chinese Embassy in Washington nor attorneys representing the Chinese companies in the trade dispute responded to a request for comment.

Copyright 2012 Bloomberg

Lead image: Wind tower via Shutterstock

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