As the U.S. Commerce Department moves forward with anti-subsidy and anti-dumping tariff proposals against Chinese solar imports, is there room for compromise between the two countries? During today's OnPoint, Timothy Brightbill, a partner at Wiley Rein and the lead trade lawyer on SolarWorld's case against Chinese manufacturers, discusses the impact of the proposed tariffs on U.S. manufacturers and installers. He also responds to the Solar Energy Industries Association's suggestion that the two governments should work together toward a solution to the trade dispute.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Timothy Brightbill, a partner at Wiley Rein and the lead trade lawyer on SolarWorld's trade case against Chinese manufacturers. Tim, thanks for coming back on the show.
Timothy Brightbill: Monica, thanks for having me back.
Monica Trauzzi: Tim, an interesting twist in the ongoing case against Chinese solar manufacturers. After the Commerce Department announced an anti-dumping tariff, the Chinese sort of fired back determining that six state-level U.S. renewable energy programs violate global trade laws. Is this fair game or is SolarWorld's initial plan sort of backfiring at this point?
Timothy Brightbill: No, no, this is proceeding just as planned. The United States is allowed to enforce its trade laws and China is also allowed to decide whether or not any U.S. policies violate WTO rules. So, we had a good first step with the anti-dumping rulings put in place. We now have margins of 30 percent up to 250 percent against Chinese cells and modules coming in. Those duties are retroactive 90 days, so any goods coming in from China now are subject to those duties and we think that's an important step toward leveling the playing field and returning fair competition in the solar industry.
Monica Trauzzi: SEIA, the solar energy industry trade group, has called on the U.S. and the Chinese governments to work together towards a solution. What room do you think actually exists for some kind of compromise or negotiation to happen between the two countries?
Timothy Brightbill: Well, we're not looking for that at this point and, in fact, the Commerce Department doesn't settle these cases with China and there's a good reason for that; it's because China, in the past, has violated those kind of settlement agreements. So, in fact, Commerce has not settled any of these trade remedy cases since China joined the WTO in 2001. So, China agreed to these rules when it joined the WTO. We think this case should go through to its conclusion and let the trade laws speak for themselves.
Monica Trauzzi: Why then would the solar industry trade group make this suggestion of moving towards a negotiation?
Timothy Brightbill: Well, it's unfortunate because SEIA did say that it was going to be neutral in this trade remedy case and it said that we have a right to apply the trade remedy laws, but we see this as not a neutral step, unfortunately, to call for negotiations. All we want to do is see this case through to its conclusion. Since there are unfair trade practices going on, we think the laws should be applied and the duties should be applied.
Monica Trauzzi: But SEIA represents a broad spectrum of companies within the solar industry, from manufacturers to those who install, and isn't it true that these tariffs could actually negatively impact certain segments of the solar industry?
Timothy Brightbill: Well, we think these tariffs are good for the entire industry. They're certainly good for manufacturing, I mean 12 U.S. companies have shut down or gone bankrupt or laid-off employees in the last two years as a result of the surge in Chinese imports, $3 billion worth of Chinese imports of cells and modules last year, which just crushed the U.S. industry. So, it's definitely good for the manufacturing industry. We also think it's good for installers, for suppliers to have a manufacturing base here in the United States. We need to keep that and the trade laws will help us to do that.
Monica Trauzzi: So, when SEIA says that the anti-dumping and anti-subsidy tariffs ultimately hurt the entire market, that's untrue?
Timothy Brightbill: No, we strongly disagree. The best thing to have is fair competition, not dumping and subsidies that unfairly benefit one country and that are driven by one government. It's best to have a level playing field where everyone is competing. The solar industry is highly competitive. All we're doing is addressing the unfair trade practices of one country.
Monica Trauzzi: Overall, how will solar installations in the United States be affected by these tariffs?
Timothy Brightbill: Well, we think solar installations are going to continue to grow. I mean the market doubled last year. All this does is, again, address unfair trade practices from China. The U.S. industry stands ready to supply those installations and companies can also access imports from anywhere else in the world. It's just when these subsidies and when the dumping takes place that something has to be done to address the problem.
Monica Trauzzi: But doesn't this mean more expensive solar technology here in the U.S. and couldn't that lead to a slowdown in installations?
Timothy Brightbill: Well, the trade cases will have an effect perhaps on volume or price from China, but prices have been dropping every year in the solar industry 8 to 10 percent. These products get better every year, the technology gets better every year. That's not going to change. So the only thing that's going to change is to take these dumped and subsidized imports out of the marketplace.
Monica Trauzzi: So, once these tariffs are in place, will U.S. be able to compete with China?
Timothy Brightbill: Oh, absolutely, yes, and with the rest of the world. This is an industry that should be growing here in the United States. There should be new companies adding thousands of workers and the companies we represent should be expanding right now to meet demand. They'll be ready to do that.
Monica Trauzzi: So, where does the case go from here? What are the next steps?
Timothy Brightbill: Well, right now, Commerce is actually verifying the responses of the Chinese government. They're in China right now. They're looking at all the responses that have been put in. They're also examining additional subsidies, subsidies on glass and aluminum and things like that, so the margins could even go higher than they are right now. There will be final determinations from the Commerce Department in October and from the International Trade Commission in November of this year.
Monica Trauzzi: All right, we'll end it there. Thank you for coming on the show. Nice to see you.
Timothy Brightbill: Thanks very much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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