In a move expected to stoke U.S.-China trade tensions, the International Trade Commission (ITC) yesterday ruled that U.S. solar manufacturers have been materially injured by a surge of low-cost crystalline photovoltaic (PV) solar cells and modules entering the United States from China and Taiwan.
The final determination — coming in two votes: 5-0 in the China decision and 4-1 in the Taiwan decision — allows a schedule of punitive tariffs set by the Commerce Department to take effect, with anti-dumping duties of as high as 78 percent on some Chinese solar firms, while Taiwanese firms will see anti-dumping rates of as much as 27 percent, according to Commerce figures.
The finding also hands U.S. solar firms that had petitioned the Obama administration for trade relief another victory in their more-than-three-year campaign to push back against what they view as a Chinese attack on fair trade in the global solar PV market.
"Today’s decision confirms the facts set out in our initial filing. … Manufacturers in China and Taiwan used illegal trade practices that harm the U.S. industry," Mukesh Dulani, U.S. president of SolarWorld, the lead petitioner in the case, said in a statement welcoming the ITC’s final ruling.
Critics of SolarWorld, including the Solar Energy Industries Association, criticized the final approval of the tariffs as "a clear setback for the solar industry."
SolarWorld, along with a handful of co-petitioners, has pressed U.S. officials for stiff trade sanctions against Chinese solar manufacturers that have allegedly benefitted from illegal government subsidies and have engaged in widespread dumping of below-cost solar equipment onto international markets with the intent of squashing competitors.
An initial trade case, brought in 2011 by the SolarWorld-led Coalition for American Solar Manufacturing, resulted in an initial round of U.S. sanctions against Chinese solar manufacturers and the Beijing government. But SolarWorld brought a second complaint in 2013 claiming that Chinese firms were circumventing the first round of tariffs by outsourcing some of their cell and module manufacturing to other countries like Taiwan.
A subsequent investigation by the Commerce Department found evidence to support SolarWorld’s claims, leading to last month’s decision to impose new anti-dumping tariffs on manufacturers of Chinese and Taiwanese panels that had taken advantage of the legal loophole (ClimateWire, Dec. 17, 2014).
Those tariff rates were effectively ratified by the ITC in yesterday’s votes.
U.S. industry’s reaction remains split
Two mandatory Chinese respondents in the latest anti-dumping complaint, Trina Solar and Renesola/Jinko, received anti-dumping duties of 26.71 and 78.42 percent, respectively, while 43 other Chinese exporters will see tariffs of 52.13 percent, according to Commerce officials. Two Taiwanese firms, Gintech Energy Corp. and Motech Industries Inc., received final dumping margins of 27.55 and 11.45 percent, respectively, while all other Taiwanese producers received anti-dumping tariffs of 19.5 percent.
Commerce officials also added new counterveiling duties, which address illegal subsidies, of between 27 and 49 percent against several Chinese manufacturers.
The duties are expected to take full effect on about Feb. 1. Customs and Border Protection agents have been collecting the duties since last summer, however, when Commerce officials made a preliminary determination that illegal trade practices were occurring.
SolarWorld’s Dulani said petitioners in the solar trade case will continue to work with customs and border agents "to ensure that U.S. trade laws are thoroughly and effectively enforced to prevent circumvention."
While SolarWorld commended the ITC votes, critics of the Obama administration’s solar trade policies toward China took a dim view of the latest developments.
Rhone Resch, the Solar Energy Industries Association’s president and chief executive, characterized SolarWorld’s trade case as "a needless and counterproductive litigation." Even so, he said, "U.S. solar manufacturing and services jobs continue to grow, while solar prices continue to fall.
"But consider how much better, and stronger, the U.S. solar industry would be doing without hundreds of millions of dollars in added tariff costs," Resch added. "In all likelihood, the industry would be well ahead of its goal of installing 10 gigawatts of new solar annually. We’d also see a robust and growing U.S. polysilicon industry, shipping billions of dollars in exports and benefitting our economy. Instead, we’re now faced with U.S. polysilicon plant closures and layoffs."
Jigar Shah, president of the industry group known as the Coalition for Affordable Solar Energy, predicted that the new tariffs will artificially drive up the cost of solar power and slow the growth of the nation’s fastest-growing renewable energy sector.
"It’s particularly troubling that U.S. trade policy is working to increase the cost of solar products through tariffs when we know that more affordable solar energy creates more American solar jobs," he said in a statement.