Finding in a preliminary determination that crystalline silicon photovoltaic (PV) cells are being sold in the U.S. at below-market prices that harm domestic manufacturers, the Commerce Department slapped a 31% tariff on 61 Chinese PV producers and exporters with slight variations by company. All other Chinese producers and exporters of the cells will be subject to a tariff of nearly 250%. The decision has incited mixed, heated reactions from the solar industry.
The tariffs are much higher than the 2.9% to 4.7% levied on Chinese solar panel imports by the Commerce Department this March, after it concluded from a countervailing duty investigation that the Chinese government provided illegal subsidies for its industry.
As a result of last week’s determination, Chinese cell makers Wuxi Suntech and Trina Solar received preliminary dumping margins of 31.22% and 31.14%, respectively. Fifty-nine other exporters qualified for a separate rate of 31.18%, and all other Chinese producers/exporters received a preliminary dumping margin of 249.96%.
The scope of the U.S. government’s investigations covers not just imports of cells, modules, and panels produced in China, but also imports of solar modules and panels produced outside China made with cells produced in China. Imports of solar cells from China were valued at an estimated $3.1 billion in 2011, the Commerce Department said.
The tariffs could become permanent if the Commerce Department finalizes its findings in a procedural step by this October, and the U.S. International Trade Commission (ITC) follows suit, issuing an affirmative final determination that Chinese solar cell imports materially threaten the domestic industry. The ITC’s decision is expected before Nov. 19.
The seven-company Coalition for American Solar Manufacturing (CASM) lauded the Commerce Department’s decision in response to the dumping case filed last October by Oregon-based SolarWorld Industries America.
A Bittersweet Determination
“The verdict is in," said Gordon Brinser, president of SolarWorld. "In addition to its preliminary finding that Chinese solar companies were on the receiving end of at least 10 [World Trade Organization]-illegal subsidies, Commerce has now confirmed that Chinese manufacturers are guilty of illegally dumping solar cells and panels in the U.S. market."
The decision will impact the U.S. marketplace for Chinese manufacturers because "it will begin to remove the advantage they have had as a result of their illegal trade practices," CASM said in a statement. "However, it will not disrupt solar growth or solar installations in the United States."
But the Coalition for Affordable Solar Energy (CASE), a group of about 70 solar companies— claiming to represent 98% of U.S. solar sector jobs—that set up their own alliance to counter CASM claims, decried the decision as "damaging."
“The global market for solar cells and modules is more competitive than ever, and companies around the world, including SolarWorld, have been forced to cut prices to compete,” CASE President Jigar Shah said. “Ultimately, free global competition is good for American consumers and American workers. That’s why all of the major segments of the American solar industry, including solar manufacturers, have united to oppose SolarWorld’s reckless and hypocritical campaign to raise solar prices."
CASE member and CEO of REC Silicon Tore Torvund said the decision was "short-sighted in the extreme and a severe setback for President Obama’s clean energy program." The U.S. solar sector was "very concerned about the increased likelihood that China will retaliate with their own tariffs on polysilicon exports from U.S. producers such as REC Silicon," he said.
"Triggering a solar trade war is not in the best interests of the U.S. solar industry or its customers.”
EU May Consider Similar Tariffs
The U.S. government’s decision on German solar panel maker SolarWorld’s petition could catch on in the European Union (EU).
According to Euractiv, the EU is actively considering a lawsuit against China. At the end of July, meanwhile, SolarWorld is expected to file a petition with the European Commission calling for duties against Chinese companies.
“Our aim is open and fair trade,” EU trade spokesman John Clancy told EurActiv on Tuesday. “So it is our role to defend European production against international trade distortions such as subsidisation or dumping, by applying trade defence instruments in compliance with EU law and WTO rules.”
It is unclear how Beijing will respond to the U.S. government’s ruling. "The U.S. ruling is unfair, and the Chinese side expresses its extreme dissatisfaction," said Chinese Commerce Ministry spokesman Shen Danyang in a statement.
Sources: POWERnews, Commerce Department, ITC, CASM, CASE, Euractive, China Commerce Ministry