The Commerce Dept. Oct. 10 lowered some anti-dumping duties and significantly increased anti-subsidy duties on imports of Chinese solar silicon photovoltaic (PV) cells. In its final determination regarding SolarWorld USA–CASM’s (Coalition of American Solar Manufacturing) WTO unfair trade petitions, Commerce left unchanged the scope of its final determination. That, according to proponents and supporters of the petitions — including a group of US Congress members — leaves open a loophole that enables Chinese PV cell manufacturers to easily evade the duties.
Commerce set anti-dumping duties of 31.73% on imports of solar PV cells and panels from Suntech, 18.32% on those of Trina Solar, 25.96% on those from other companies that had requested but not received individual duty determinations, and 249.96% from all other Chinese producers, including those controlled by the Chinese government, CASM noted in a press release. The anti-dumping duties are in-line with those of Commercie’s preliminary determinations, which were imposed in late May: 31.14%, 31.22%, 31.18%, and 249.96%, respectively.
In contrast, the Commerce WTO litigation panel raised anti-subsidy duties substantially. Anti-subsidy duty rates of 14.78% were imposed for imports from Suntech, 15.97% on Trina Solar imports, and 15.24% for all other Chinese manufacturers. These are significantly higher than Commerce’s preliminary anti-subsidy duties announced in March of 2.9% for Suntech, 4.73% for Trina, and 3.59% for all other Chinese producers.
A Victory for US Manufacturers, though Loophole Remains
Critically, Commerce’s final determinations apply to imports of PV cells made by Chinese manufacturers in China only. Their limited scope leaves a large loophole that Chinese manufacturers are already exploiting, CASM states.
For instance, solar PV cells manufactured by government-subsidized Chinese manufacturers in China but assembled into PV modules and solar panels in third countries are exempt from duties. Similarly, PV cells made by manufacturers in third countries and assembled into solar panels in China are also exempt from duties.
“By leaving this ‘loophole’ as defined by Members of Congress in its enforcement decision, Commerce continues to expose U.S. manufacturers to Chinese unfair trade practices,” said SolarWorld Industries America’s president Gordon Brinser. “This will undercut the positive impact of Commerce’s duties. Assuming the International Trade Commission rules in our favor next month, we plan to ask the Commerce Department and Customs and Border Protection to address the circumvention issue through strict enforcement actions.”
The limited scope of Commerce’s ruling has prompted 27 members of Congress to speak out publicly in favor of extending the scope of the import duties. They’ve sent the Commerce WTO panel a letter pointing out the loophole and its negative effects, and requesting that they close the loophole by broadening the scope of the duties.
“As 27 Members of Congress, including Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio), Leader Nancy Pelosi (D-Calif.) and Reps. Tammy Baldwin (D-Wisc.), Earl Blumenauer (D-Ore.), Sander Levin (D-Mich.), Edward Markey and many others, have pointed out in recent weeks, the loophole will make it difficult to enforce the Commerce decision. We will work with them to pursue remedies to close the loophole. Moreover, to date, we are unaware of a single member of Congress who urged the President to leave the loophole in place,” Brinser continued.
Added Steve Ostrenga, CEO of Milwaukee solar PV manufacturer Helios Solar Works USA, a founding member of CASM: “We remain confident that American manufacturers can compete with China on an equal footing. Helios, and the other manufacturing members of CASM, is in this battle to win it. Assuming an adequate response from the Obama administration on enforcement, we have some hope that there will continue to be a viable solar manufacturing base in the United States.”
“On behalf of the more than 18,000 workers who belong to the coalition, I want to thank the investigators at the Commerce Department for their hard work on this politically charged case and, especially, Sen. Wyden for taking up the cause of American solar manufacturing,” Brinser added.
“Without Sen. Wyden’s efforts, the industry would have never gotten as far as we have. Today’s decision is one part of a solution that will help American solar manufacturers recover from China’s unfair trade practices.”
Chinese solar energy industry participants and government authorities have retaliated, launching WTO unfair trade investigations into imports of silicon and PV cell manufacturing equipment from US manufacturers, as well as other US imports.
Defusing Trade Tensions
The US Solar Energy Industry Association (SEIA) is one among several other groups looking to defuse international solar energy trade tensions. “As we near the end of these investigations, it’s not too soon to take stock of what has been achieved, consider whether opportunities were missed, and, most importantly, start thinking about how to move forward,” SEIA president Rhone Resch stated in a press release.
“While today’s decision rightly shows that the U.S. will protect its rights in the global trading system, we’re also learning that 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 the future must begin with diplomacy. 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.
“Indeed, this collaborative spirit is alive and well elsewhere in the global renewable energy industry. This week, SEIA, other trade groups, and multinational companies joined forces to call for mutually-beneficial, long-term trade solutions through the World Economic Forum’s Green Growth Action Alliance.”
The WTO anti-subsidy and anti-dumping process will come to a close on Nov. 7 when the International Trade Commission (ITC) will decided whether the international trade practices followed by the Chinese government and silicon PV manufacturers are harming US industry. The ITC WTO panel voted affirmatively 6-0 in its preliminary determination last December.
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.