The Commerce Dept. today issued its preliminary determination on Chinese manufacturers’ dumping of silicon solar photovoltaic (PV) cells and panels in the U.S. Following up on the petition filed by the Coalition for American Solar Manufacturing (CASM), Commerce imposed preliminary margins of 31.14% for Trina Solar imports, 31.22% for Suntech, 31.18% for other Chinese manufacturers, and 249.96% for China-wide imports from companies that did not participate in the case.
The ruling appears to mark a turning point in U.S.–China trade relations, as the Obama administration turns up the heat on China and unfair trade practices. U.S. Senators Charles Schumer and Sherrod Brown on May 15 announced a proposal aimed at loosening “China’s grip on the global solar panel market.” The Senators’ proposal would exclude Chinese-made solar panels from qualifying for the 30% federal tax credit that U.S. individuals and businesses receive for purchasing and installing solar panels.
“The verdict is in,” said Gordon Brinser, president of SolarWorld USA, which has led CASM in filing dumping and unfair subsidy petitions against China and Chinese manufacturers.
“In addition to its preliminary finding that Chinese solar companies were on the receiving end of at least 10 WTO-illegal subsidies, Commerce has now confirmed that Chinese manufacturers are guilty of illegally dumping solar cells and panels in the U.S. market. We appreciate the Commerce staff’s hard work on this matter.”
Commerce also found in favor of CASM’s request for “critical circumstances,” which it filed subsequent to filing its two petitions as Chinese manufacturers ramped up exports to the U.S. to avoid possible duties. As a result, the preliminary tariff rates announced today will be retroactive 90 days from the date the decision is published in the Federal Register.
Turning Point in US-China Trade Relations?
SolarWorld Americas and six other solar manufacturers, including Milwaukee’s Helios Solar Works and Somerset, NJ-based MX Solar USA, filed anti-dumping and countervailing duty petitions with the Dept. of Commerce and International Trade Commission last October 19. CASM’s membership now totals 210, the large majority of whom are active in other parts of the U.S. solar PV value and supply chain (besides manufacturing).
In addition to asserting that Chinese manufacturers were dumping silicon solar PV cells and panels in the U.S. market, they claimed that the Chinese government was providing billions of dollars in subsidies outlawed by the World Trade Organization (WTO).
Commerce issued a preliminary decision on the countervailing duty petition on March 17, setting them at levels that were much lower than generally expected.
“Commerce’s ruling in the SolarWorld case is a bellwether decision,” commented Steve Ostrenga, chief executive officer of Helios. “It underscores the importance of domestic manufacturing to the U.S. economy and will help determine whether the country will be a global competitor in clean technologies or outsource them China. It is also critically important for thousands of U.S. workers.”
Opponents of CASM’s petitions, both upstream and downstream in the industry supply chain, have been vocal in their criticism, arguing that legal action, duties and subsidies aren’t the best way to address China’s unfair trade policies and actions.
The fear of losing Chinese business, the prospect of Chinese retaliation, and the potential for high tariffs and duties to curtail what’s been rapid growth in U.S. solar PV installations and jobs has weighed heavily on industry players.
By making a start at enforcing internationally agreed-upon rules on free and fair trade, the duties and tariffs will level the playing field, CASM counters. They won’t “disrupt solar growth or solar installations in the United States,” CASM asserts. Moreover, the organizations argues, removing and penalizing the illegal practices will help establish a healthier, more sustainable market for solar PV.
“The Chinese government will no doubt respond negatively to this announcement. They may even threaten to take retaliatory action against U.S. companies. If so, Washington must respond with a steady hand,” writes Center for American Progress analyst Melanie Hart.
“If China wants to negotiate, the United States should be ready to listen. If China tries to force the U.S. government to back down in this dispute by threatening U.S. companies, however, that is not negotiation. Backing down to those threats would be capitulation, and capitulation is a losing game. Just as we cannot allow powerful corporations to bully and harass citizens who file legal complaints against them, we cannot allow China to bully and harass U.S. companies over trade complaints.”
“If China wants to contest these numbers, they should follow the U.S. example and do so according to the law and within the framework of our mutually agreed trade institutions. At the recent Strategic and Economic Dialogue meetings in Beijing, Chinese leaders promised to follow global trade rules and support rather than undermine the rules-based global trading system. Now the world will be watching to see if they uphold that promise.”
Final Determinations Expected in the Fall
“Commerce today put importers and purchasers on notice about the consequences of importing illegally subsidized and dumped products from China,” SolarWorld USA CEO Brinser continued.
“We understand U.S. Customs and other federal agencies are already aggressively enforcing the countervailing tariffs in order to prevent circumvention, and we expect they will be equally vigilant with the anti-dumping tariffs.”
Commerce Dept. officials will carry on with their investigations, which includes confirming the accuracy of information provided by the Chinese government and manufacturers. Final Commerce Dept. determinations for both cases are expected in late July, though it’s likely they will be postponed until late September, according to CASM. The ITC is expected to issue its final determination on whether or not U.S. silicon solar PV manufacturers have been harmed by Chinese trade practices later this fall.
I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.