The US slapped new import duties on solar panels and other related products from China on Tuesday after the US Department of Commerce ruled they were produced using Chinese government subsidies, potentially inflaming trade tensions between the two countries.
The US arm of German solar manufacturer SolarWorld AG filed a petition complaining that Chinese manufacturers are sidestepping duties imposed in 2012 by shifting production of the cells used to make their panels to Taiwan and continuing to flood the US market with cheap products.
The new complaint seeks to close that loophole by extending import duties to also cover panels made with parts from Taiwan.
In a preliminary determination, the Department of Commerce imposed duties of 35.21 percent on imports of panels and other products made by Wuxi Suntech Power Holdings Co (無錫尚德) and five other affiliated companies, 18.56 percent on imports of Trina Solar Ltd (天合光能) and 26.89 percent on imports from other Chinese producers.
A preliminary decision on the anti-dumping section of the complaint is due by July 25. That section covers panels assembled in China from Taiwanese inputs or third-country cells made from Chinese inputs.
The anti-subsidy duties will hurt the Chinese solar industry, although the overall impact should be limited given the US accounted for just about 10 percent of Chinese solar shipments last year, industry officials and analysts say.
The Chinese government, which has been scrambling to boost domestic demand to offset declines in orders from Europe — previously the dominant buyer of Chinese solar products — yesterday expressed its “strong dissatisfaction” with the US decision.
In a notice posted on its Web site, China’s Ministry of Commerce said the US had “ignored the facts” and abused trade rules in order to protect its own industry, adding that the use of trade measures “would not solve the development problems of the US solar industry.”
China retaliated against the original US duties by introducing anti-dumping and anti-subsidy duties on imports of US polysilicon, the key raw material in solar cells, and has accused the US of trying to curb Chinese imports.
In the US, the complaint has pitted SolarWorld Industries America, which makes crystalline silicon solar panels at its factory in Hillsboro, Oregon, against US solar companies that mainly focus on installation and who say imposing import duties will only push up the cost of solar power.
“The ruling is a major setback for the entire US solar industry because it will immediately increase the price of solar power and cost American jobs in one of fastest-growing sectors of the US economy,” the Coalition for Affordable Solar Energy said.
The Solar Energy Industries Association said SolarWorld and Chinese manufacturers should try to settle the dispute before the industry was hurt.
However, SolarWorld said it is not fair that Chinese solar producers benefit from government aid from their own country, including discounted loans and free utilities, making it hard for US firms to compete.
“This is a strong win for SolarWorld and the domestic solar manufacturing industry,” said lawyer Tim Brightbill, from Wiley Rein LLP, representing SolarWorld.
Both the US Department of Commerce and the International Trade Commission (ITC) have to issue final rulings in favor of SolarWorld before the duties are finalized.