Washington Announces Final Duties on Chinese Solar Cells

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The US Commerce Department has determined final anti-dumping and anti-subsidy - also known as countervailing - duties on imports of Chinese solar cells, the government agency said last Wednesday. The highly-anticipated announcement comes a year after a coalition of US solar panel manufacturers first filed the case, which ramped up tensions between Beijing and Washington over their respective renewable energy policies.

The US Commerce Department, in its final determinations today, found that Chinese producers/exporters have dumped solar cells in the United States at prices between 18.32 to 249.96 percent lower than their fair value. The practice of dumping involves companies selling their products abroad at prices below normal market values, causing harm to the domestic industry of the importing country.

In their findings, Commerce also determined that Chinese producers/exporters have received ?countervailable? - or unfair - subsidies of 14.78 to 15.97 percent.

The US International Trade Commission will vote by November on whether or not to approve these duties, Commerce said. The additional duties will only be imposed if it is agreed by a majority of commissioners that US producers have been materially harmed or threatened by Chinese-made solar products.

According to Commerce, US authorities will be able to apply both types of duties retroactively. Specifically, these will be collected 90 days prior to the date of Commerce?s preliminary determinations, which were issued in March and May of this year for countervailing and anti-dumping duties, respectively. The one exception involves anti-dumping duties applied to Wuxi Suntech, which will be collected as of the date of the preliminary anti-dumping determination.

The announcement follows a lengthy investigation by the US agency into a complaint brought last year by the Coalition for American Solar Manufacturing (CASM), a group of seven US solar panel manufacturers led by SolarWorld Industries America.

The German parent company of SolarWorld Industries America is also behind an investigation launched by the European Commission last month into similar allegations of Chinese solar panel manufacturers dumping their products onto the EU?market (see Bridges Trade BioRes,?13 September 2012).? A ruling in the EU case is not expected until late 2013.

Higher countervailing duties

With regarding to dumping, this final ruling of the US agency largely upholds the preliminary findings that it delivered in May, when it determined that Chinese producers/exporters had been selling solar cells in the US at prices that were between 31.14 and 249.96 percent lower than their normal price. The new numbers are now between 18.32 and 249.96 percent, with some companies facing lower anti-dumping duties than they were set to previously.

With regard to countervailing duties, the new numbers are noticeably higher than the March determination, which had originally said that Chinese producers received unfair government support at levels between 2.9 and 4.73 percent. (See Bridges Trade BioRes,?22 March 2012) The final determination released today sets the range of duties between 14.78 to 15.97 percent.

Statements from Chinese officials were not available as Bridges went to press on Wednesday evening. Earlier comments from Beijing, however, have been critical of the case, with the country?s Ministry of Commerce accusing the US in May of ?deliberately provoking trade friction in the clean energy sector.?

Beijing has also been investigating Washington?s own support for domestic renewable energy programmes, concluding in May after an internal investigation that such government assistance violates WTO rules that prohibit unfair subsidies and favourable national treatment for domestic producers over foreign importers.

The 40 percent drop in the global price of solar panels between 2006 and 2011 has largely been attributed to huge growth in Chinese solar panel production.? Some analysts say that oversupply by Chinese solar panel manufacturers is to blame for damage to profits of European and US counterparts, with share prices experiencing a similar plunge.

US solar industry split

While US solar panel manufacturers are expected to welcome the decision, US firms which purchase solar panels for use in solar energy projects have long complained that anti-dumping and countervailing duties will raise the cost of solar energy projects, harming both the US and China in the long run.

For their part, the Coalition for Affordable Solar Energy, a coalition of over 100 US firms, has campaigned openly against the CASM case, arguing that increased duties will damage US efforts to promote sustainable energy as well as harming service-related jobs in the US solar industry.

?Punitive tariffs are the wrong policy at the wrong time, CASM?s President Jigar Shah said in an?op-ed published by GreenTech Media earlier this week, in anticipation of today?s announcement. ?Because the costs of solar energy have been falling, communities around the country are selecting solar power. With punitive tariffs, these customers will think twice about paying a premium for solar energy.?

Those organisations behind the original complaint, however, have argued that these duties are necessary to level the playing field in the increasingly competitive renewable energy market

?Even with our automation, low direct labour costs, and freight advantage, we cannot compete with the Chinese government,? Steve Ostrenga, Chief Executive of CASM member Helios Solar Works,?testified in front of the ITC earlier this week.

?We hope that with relief from this case, we will be able to stop the harm to this industry and return to fair competition in this market,? Kevin Kilkelly of SolarWorld Americas added in his own testimony in front of the panel.

ICTSD Reporting; ?US set to give final decision on Chinese solar panel duties,? REUTERS, 9 October 2012.

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Source: http://ictsd.org/i/news/biores/147229/

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