Charles W. Thurston, Contributor with updates by REW.com Editors
November 07, 2012 | 28 Comments
California, USA -- The International Trade Commission (ITC) has voted 6-0 that imports of Chinese solar cells have harmed U.S. solar manufacturers. The ruling means that tariffs will indeed be added to solar modules that include cells manufactured in China. Further, the ITC has determined that there were no critical circumstances, and thus no reason to apply the tariffs retroactively, a move applauded by the Coalition for Affordable Solar Energy (CASE).
Responding to the ITC ruling, E.L. “Mick” McDaniel, Managing Director of Suntech America offered this statement:
The continued growth of trade barriers represents a serious challenge to the U.S. solar industry, for American jobs, and for energy consumers globally. SolarWorld’s hypocritical campaign has forced the fast-growing American solar industry to foot the bill for SolarWorld’s competitive failures. Further damage can be prevented if governments engage in constructive dialogue to roll back protectionist barriers that limit our industry’s ability to compete against fossil fuels. As a U.S. manufacturer and global company, Suntech will continue to oppose unnecessary solar taxes and promote affordable solar energy everywhere. As a global company with global supply chains and manufacturing in China, Japan, and the U.S., we remain committed to our U.S. customers and will continue to supply hundreds of megawatts of high-quality, affordable solar panels that will not be subject to these U.S.-China tariffs.
Our original story, published on October 10, 2012:
The U.S. Commerce Department today returned a hawkish decision on its investigation into the dumping and subsidization of Chinese solar exports, levying associated import tariffs on several billion dollars worth of the imports, ranging from 18.32 percent to 249.96 percent of declared value. The dumping complaint was initiated by Bonn's SolarWorld, and has been joined by several other U.S. manufacturers. The politically and economically contentious case positioned "injured" solar cell and photovoltaic module makers in the United States on one side of the legal action, while solar developers, distributors and installers were lined up on the other side, seeking to keep lower prices in the global solar industry.
Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), commented that, “While today’s decision rightly shows that the U.S. will protect its rights in the global trading system, trade litigation alone is not enough to solve the complex challenges that exist between the U.S. and China. What is immediately clear is that for solar to thrive globally, there is a need to build consensus on acceptable forms of government support for industry.“ He added that, "Prior to these trade cases, the U.S. and Chinese solar industries enjoyed a strong, productive working relationship. For both sides to succeed going forward, we must return to our collaborative roots at both the industry and government levels."
Early reports on the damages dished out by Commerce indicate that among the most affected Chinese companies, Suntech Power Holdings was assigned a cumulative anti-dumping (AD) import duty of 31.73 percent plus a countervailing (CVD), or anti-subsidy, duty of 14.78 percent. Similarly, Trina Solar was assigned a cumulative 18.32 percent anti-dumping import duty plus a 15.97 percent anti-subsidy duty. These two companies imported the lion's share of the Chinese solar goods in question during the investigation period. According to Bloomberb news, an additional 59 Chinese companies will be subject to an anti-dumping penalty of 25.96 percent, based on a determination by the Commerce Department of how much below cost they were selling their goods. All other Chinese producers will be subject to a 249.96 percent rate to deter dumping. There was a 10.54 percent reduction in the AD rate to avoid double counting of anti-subsidy rates.
Because the duties are complicated and were altered from the prelimary duties assigned, the Washington-based Coalition for Affordable Solar Energy (CASE) released the folliowing chart to provide more clarification.
CASE is an opponent of the trade case and President Jigar Shah responded to the final Commerce rulings saying, "We are gratified that the scope of today’s decision is limited only to solar cells made in China and that the [Commerce] Department did not significantly increase the tariff from its preliminary decision in May. We are hopeful that continued innovations in technology, a competitive global marketplace, and demand-generated pressure for lower prices will take precedence moving forward. At the same time, we remain concerned about the growing global trade war, which will only hurt American solar industry jobs, growth and consumers."
CASE and other opponents to the anti-dumping investigation laid out an argument that continuing lower costs in solar are inevitable, and have positive effects for the surviving players in the industry. "On behalf of 97 percent to 98 percent of the U.S. solar industry that fought against SolarWorld, we are all looking forward to ending this distraction and returning to our everyday focus of creating jobs and lowering renewable energy costs,” Shah added.
“We’re pleased with the margins calculated by the Commerce Department, particularly the subsidy margins which increased significantly on the entire Chinese industry,” Timothy Brightbill, an attorney for Wiley Rein LLP in Washington who represents manufacturers led by SolarWorld, said in an interview with Bloomberg news.
“Only fair competition can provide sustainable gains in technological efficiency, cost reduction and end-user pricing. Commerce’s decision raises the industry’s chances of reclaiming equal footing for domestic, sustainable and environmentally sound solar-technology producers and their jobs,” said Gordon Brinser, President of SolarWorld America in a statement.
The U.S.-China Solar Trade War is far from over. The U.S. International Trade Commission ITC will determine on November 7 whether U.S. manufacturers have been harmed by Chinese imports. If the ITC does determine injury has occurred, tariffs imposed by the U.S. Commerce Department would continue. In retaliation, China in May filed a complaint against U.S. subsidies that affected over $7 billion worth of Chinese products.
The European Union, in a separate set of proceedings also is investigating the dumping of Chinese solar products on the continent, albeit considering a broader scope of products than those considered in the U.S. cases, affecting some 26.5 billion worth of imports. The EU proceedings are expected to take several more months.
Image: Gavel via Shutterstock.