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US Imposes Steep Tariffs On Importers Of Chinese Solar Panels

Diane Cardwell, Business Standard

The US Commerce Department on Tuesday imposed steep duties on importers of Chinese solar panels made from certain components, asserting that the manufacturers had benefited from unfair subsidies.

The duties will range from 18.56 to 35.21 per cent, the department said.

The decision, in a long-simmering trade dispute, addresses one of the main charges in a petition brought by the manufacturer SolarWorld Industries America. While it is preliminary, the ruling means that the US will begin collecting the tariffs in advance of the final decision, expected later this year.

“Today is a strong win for the US solar industry,” said Mukesh Dulani, president of SolarWorld Industries America, based in Hillsboro, Ore. “We look forward to the end of illegal Chinese government intervention in the US solar market, and we applaud Commerce for its work that supports fair trade.”

The decision comes against a backdrop of increasing trade conflict driven at least partly by a rapidly evolving industry whose centre of manufacture and installation has shifted over the last decade from Europe to Asia. Although the European Union settled a similar dispute with China through negotiation, tensions have still bubbled. And the United States is seeking to challenge India over the local content requirements for its solar programme through the World Trade Organization.

“You have all these manufacturers that are seeing this really rapid change in their ability to sell into the market and the prices at which they have to sell and who their competitors are,” said Shayle Kann, vice-president for research at GTM Research, which tracks clean-tech industries. “The solar market is growing, really volatile and strategic for a lot of these countries.”

In 2012, the United States imposed duties of roughly 24 to 36 per cent on imported panels made from Chinese solar cells – the final major parts that are assembled into completed modules – after concluding that Chinese solar companies had received unfair subsidies from their government and dumped products on the American market below costs.

But many Chinese companies were able to avoid the duties by assembling panels from cells produced elsewhere, especially in Taiwan, even if those cells were derived from components – called ingots and wafers – from China. Last year, SolarWorld Industries America, a subsidiary of a German company, brought a new case intended to close that loophole so that modules made from Taiwanese cells or cells made from Chinese ingots or wafers would be subject to duties as well.

The company, which has support from some other solar employers in the United States, sought tariffs to compensate both for the subsidies and for the charged dumping. A preliminary decision on the dumping issue, which could significantly increase the tariffs, is expected on July 25.

But the case has also sown disagreement within the domestic solar industry, where many manufacturers have been squeezed to bankruptcy by intense competition from China while developers, installers and consumers have been helped by the availability of inexpensive panels. Amid a similar trade case overseas, the Chinese and the European Union agreed on a price floor and volume quota for Chinese modules.

Still, China has escalated tensions as well, imposing tariffs in January on American and South Korean polysilicon – the base ingredient for conventional photovoltaic solar panels – and adding conditional tariffs for imports from several European countries last month.

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