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US Confirms Increased Duties On Chinese Solar Cells

by Mike Godfrey, Tax-News.com, Washington

15 October 2012


In the face of fierce opposition from the Chinese government, the United States Department of Commerce (Commerce) announced its affirmative final determinations on October 10, to impose antidumping duties (AD) and countervailing duties (CVD) on imports of crystalline silicon photovoltaic cells (solar cells), whether or not assembled into modules, from China.

Commerce has determined that Chinese producers/exporters have sold solar cells in the US at dumping margins ranging from 18.32% to 249.96%, and have also received countervailable subsidies of between 14.78% and 15.97%.

On October 19 last year, with US imports of solar cells from China increasing from USD639.5m in 2009 and USD1.5bn in 2010, to some USD3.1bn last year, several US solar manufacturers filed anti-dumping and countervailing duty petitions with Commerce and the US International Trade Commission (ITC).

The petitions alleged that Chinese manufacturers were illegally dumping solar cells and panels in the US market and receiving subsidies that are illegal under World Trade Organization (WTO) rules. Commerce has since confirmed that its investigations covered imports of solar cells produced in China and solar modules/panels produced in China from Chinese-made solar cells, as well as imports of solar modules/panels produced outside of China from solar cells produced in China.

The ITC is scheduled to make its final determination on or before November 23 this year. If the ITC makes an affirmative final determination that imports of solar cells from China materially injure, or threaten material injury to, the US solar industry, Commerce will issue AD and CVD orders. If the ITC makes a negative determination of injury, the investigations will be terminated.

As could be expected, the 226-company Coalition for American Solar Manufacturing (CASM) reacted positively to the above news, calling it “one step to restoring fair competition to the US marketplace”.

"We remain confident that American manufacturers can compete with China on an equal footing," said Steve Ostrenga, CEO of Milwaukee-based Helios Solar Works USA, one of the founding members of CASM. "Assuming an adequate response from the Obama administration on enforcement, we have some hope that there will continue to be a viable solar manufacturing base in the US."

However, it regretted that Commerce’s decision would still allow the free import of solar modules/panels made from cells produced in third countries. This decision, according to CASM, leaves a significant loophole in the final ruling as it allows Chinese manufacturers to potentially avoid the duties by using non-Chinese cells in its solar panels.

Others in the renewable energy sector have not been that convinced about the duty imposition, and have pointed to the future effect on the market. Environmentalists are disappointed because lower cost solar panels make solar energy more competitive with fossil fuels, and there are more US jobs to be had on the installation side of the solar business than in manufacturing solar cells.

The Coalition for Affordable Solar Energy (CASE) responded to the final Commerce rulings by stating that “we are gratified that the scope of today’s decision is limited only to solar cells made in China. We are hopeful that continued innovations in technology, a competitive global marketplace, and demand-generated pressure for lower prices will take precedence moving forward. At the same time, we remain concerned about the growing global trade war, which will only hurt American solar industry jobs, growth and consumers.”

As could also have been expected, the Chinese Ministry of Commerce (MOF), which is also fighting an anti-dumping investigation into Chinese solar imports into the European Union, reacted furiously to the news, calling the rulings “erroneous”, and commenting that they highlight a tendency for trade protectionism within the US.

MOF spokesman, Shen Danyang, expressed “strong dissatisfaction” with the rulings, commenting that “the US is provoking trade friction in the new energy market, and is sending a negative signal to the world by obstructing its development”. He looked forward to the duties’ early termination, but gave no indication of any Chinese retaliatory action.

TAGS: environment | tax | business | energy | law | tariffs | anti-dumping | China | enforcement | manufacturing | trade disputes | tax rates | United States | import duty | trade

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