The Commerce Dept. preliminarily affirmed its determination that China’s subsidizing its wind tower turbine manufacturers violates international WTO trade rules. The preliminary ruling carries with it countervailing duties (CVDs) that range from 13.74%-26%, which will be imposed on utility-scale wind turbine tower imports from China, as well as those from Chinese manufacturers in Vietnam.
The ruling is a victory for the Wind Tower Trade Coalition, a group of four U.S. utility-scale wind turbine tower manufacturers that filed unfair subsidy and dumping petitions with the Commerce Dept. and the U.S. International Trade Commission in late December 2011. The Wind Tower Trade Coalition’s members are Wisconsin’s Broadwind Towers, Inc., North Dakota’s DMI Industries, Nebraska’s Katana Summit LLC and Texas’s Trinity Structural Towers, Inc.
Commerce’s ruling marks the second instance in two weeks that it’s found China’s violating agreed-upon WTO rules. Two weeks ago, Commerce found that Chinese manufacturers of silicon solar PV cells and panels have been dumping product below cost in the U.S. market, imposing duties on imports of silicon solar PV from Chinese manufacturers ranging from 31% to 250%. That followed a previous determination that China’s subsidization of silicon solar PV manufacturers also violates WTO trade rules, which carried the imposition of comparatively low CVDs ranging from 2.9% to 4.37%.
Is there a pattern here?
Commerce’s recent decisions are clear indications that the Obama Administration is following through on its publicly stated intention of strengthening monitoring and enforcement of international WTO trade rules meant to establish a level playing field across an increasingly globalized economy. They also highlight the recent history of long running trade disputes with China, the root of which seem come down to the simple fact that China, a “non-market” economy, has not been honoring the WTO rules its pledged to uphold.
What these apparently boil down to is that China’s subsidies to Chinese manufacturers result in exports below the actual cost of production in China. Commerce has found that these preferential “supply-side” subsidies violate WTO trade rules in that they are predatory, resulting in exports that harm manufacturers in other WTO member countries.
U.S. imports of utility-scale wind turbine towers totaled an estimated $222 million in 2011, more than double 2010’s estimated $103.57 million, according to the U.S. Census Bureau’s Global Trade Atlas. In its preliminary determination on China’s subsidization of its utility-scale wind turbine tower manufacturers, Commerce imposed a net subsidy rate of 13.74% on “mandatory respondents” CS Wind China Co. Ltd., CS Wind Tech (Shanghai) and CS Wind Corp.
A preliminary net subsidy rate of 26% was set for mandatory respondents Titan Wind Energy (Suzhou) Co. Ltd., Titan Lianyungang Metal Products Co. Ltd., Baotou Titan Wind Energy Equipment Co. Ltd. and Shenyang Titan Metal Co. Ltd. A preliminary net subsidy rate of 19.87% was set for all other Chinese producers/exporters.
Commerce is now moving forward and instructing U.S. Customs and Border Protection (CBP) to collect cash deposits on landing of these products based on its preliminary CVD rates. Commerce intends to issue its final determination on August 13. The ITC’s final determination is scheduled for Sept. 27.