By Jack Keough
Now that the United States International Trade Commission (USITC) has ruled that the United States can impose tariffs on most solar panels imported
from China, there are signs that the Chinese might retaliate.
China is reportedly conducting its own investigation into
alleged subsidies for U.S. and South Korean companies that export polysilicon,
a key raw material in solar panels, according to various news reports.
Chinese Commerce Minister Chen Deming said on
Saturday, “If you say I bought your equipment and raw materials but now that
I am shipping my products you want to pop on a tariff, fine then, but why
should I buy any more of your raw materials or equipment?” Chen told
reporters on the sidelines of the 18th Communist Party Congress that will
anoint the next generation of Chinese leaders, Fox Business News reported.
“That’s why I say any unilateral trade action
will also impact the instigator. China is developing, urbanizing. China has a
lot of construction under way and will need solar products, so the U.S. is
losing out on a big market in the future.”
U.S.
companies that market and install Chinese solar panels were disappointed by the
USITC vote and urged the U.S. and Chinese governments to negotiate a
solar-energy trade deal that both sides can accept.
“Unilateral tariffs and a trade war in today’s
interconnected global marketplace are unnecessary and detrimental to effective
and efficient business competition,” Jigar Shah, president of the
Coalition for Affordable Solar Energy, said in statement. He said he was disappointed by the resolution of
what he called a distracting and politically charged case.
The six to zero ruling made last week by the Trade
Commission means that the United States can order tariffs on those imported solar
panels from China. The decision will have a major impact on companies that manufacture,
distribute and install solar panels.
The case had been brought by American solar panel
makers that claim the market is being flooded by cheap Chinese imports. Manufacturers
complained that Chinese manufacturers with the help of its government were selling
or “dumping” the panels at below production costs in order to eliminate U.S. competitors.
About a dozen companies that make solar panels in the United States have gone
out of business in the past year.
The penalties are good for five years. The U.S.
government will then re-evaluate whether the tariffs are still necessary and at
what levels.
Gordon
Brinser, president of SolarWorld Industries America Inc., based in Oregon, and the
leader of the Coalition of American Solar Manufacturing (CASM) said it is
apparent that Chinese solar manufacturers with the support of the Chinese
government have attempted to “game” the international trading system in order
to gain a virtual monopoly on solar cells and modules sales in the U.S.
One bright spot for U.S. solar firms that bought
Chinese-made solar panels earlier this year was the commission’s reversal of
retroactive solar tariffs.
More than $3.1 billion in Chinese solar panels and
cells were imported by the U.S. in 2011, according to the U.S. Department of Commerce.
That number is twice what it was in 2010, a year in which China’s government
spent more than $30 billion to subsidize its solar industry, U.S. energy
officials said.
A group of companies, including China-based Suntech
Power Holdings Co., fought the complaint. The group claimed that the U.S.
companies created their own difficulties by making poor business decisions such
as failing to adapt their products to the needs of customers.
Just how effective those tariffs
will be is disputable. The tariffs apply to panels made of Chinese produced
solar cells. Chinese companies would still be able to avoid the duties by
assembling the panels composed of cells produced elsewhere even if their
components come from China, the NY Times noted.
—
Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com
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