US slaps lighter than expected duties on China solar imports

March 22, 2012
Americans are getting serious about defending their solar industry

The United States Commerce Department on Tuesday announced that it would impose duties ranging from 2.9 to 4.73 percent on imports of Chinese solar panels; far lower than hoped for but nevertheless seen as a victory for the American solar industry.

Energy analysts had expected Chinese imports of solar panels to be hit with preliminary duties of 20 percent to 30 percent and the news sent shares in Chinese solar companies soaring on Wall Street.

However, additional tariffs could be imposed in mid-May when the Commerce Department is expected to determine whether China has been dumping the panels in the US at below-cost prices.

The decision will no doubt increase tensions between the world’s two largest economies and threatens cooperation in the burgeoning clean-energy sector, which both countries say they want to promote.

Some American lawmakers and solar firms hailed the finding on illegal subsidies, saying the new tariffs will help create a more-level playing field for the domestic solar market, which has been growing rapidly despite the bankruptcy of some panel makers, such as California’s Solyndra.

The Coalition for American Solar Manufacturing, a US industry group that has complained that massive Chinese subsidies were driving them out of business, tried to put the best face on the news, according to Reuters.

“Today’s announcement affirms what US manufacturers have long known: Chinese manufacturers have received unfair and WTO-illegal subsidies,” Steve Ostrenga, chief executive officer of Helios Solar Works in Milwaukee, Wisconsin, told Reuters.

The United States imported USD2.8 billion worth of solar cells and panels from China in 2011, up sharply from about USD1.2 billion just a year earlier, according to industry estimates.

Chinese producers and US companies opposed to the duties said the preliminary decision on Tuesday belied charges that China was flooding its solar sector with subsidies.

On Wall Street there was a collective sigh of relief on the part of developers of solar panels in the US, who feared that large duties would undermine the surging growth in solar developments by sharply increasing global prices or triggering a trade war.

 “We’re pleased and in large part feel vindicated,” Robert Petrina, managing director of Yingli Green Energy’s US business said. “I think it is a positive outcome and I think it really speaks to the crux of the argument.”

In Beijing, the Ministry of Commerce (MOC) said that the US decision will hurt the interests of both sides and urged the US to take a prudent attitude when handling the dispute to safeguard the stable and sound growth of bilateral trade, according to a statement on its website yesterday.

"The US government should consider the long-term picture and prudently handle trade frictions," said an MOC official who refused to be named.

The move will affect the development of the US clean energy sector and hinder cooperation between both countries, the official said.

Earlier in the day, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products said the US move is unfair and the support the Chinese government gives to domestic companies does not violate World Trade Organization rules.

"The decision by the US Commerce Department wasn't made in accordance with the facts," read a statement issued by the chamber.

The chamber said it hopes the US will be fair when it conducts its investigation.

"The punitive tariffs are lower than we expected, but that doesn't mean that it's right for Chinese producers to be punished," said Li Junfeng, secretary-general of the Chinese Renewable Energy Industries Association.