The Department of Commerce's preliminary verdict on unfair subsidies for Chinese solar panels was handed down today, along with what amounted to surprisingly low tariffs. The preliminary determination indicates the DOC’s intention to impose a duty of 4.73 percent on U.S. imports from Trina Solar, 2.9 percent from Suntech, and 3.59 percent from all other remaining Chinese manufacturers.
These tariffs should not have a significant impact on the price of solar panels, although SolarWorld can contest the figures between now and the final determination. The other shoe to drop will be the dumping finding and any potential tariffs related to that finding, the announcement of which is scheduled for May. Any additional tariffs will be added to the unfair subsidies tariff.
Here are some reactions and statements from concerned parties in the industry:
President Barack Obama, from a speech on Wednesday at the Copper Mountain Solar Project in Boulder City, Nevada
"We’re also enforcing our trade laws to make sure countries like China aren’t giving their solar companies an unfair advantage over ours. And that’s important because countries all around the world -- China, Germany, you name it -- they understand the potential. They understand the fact that as countries all around the world become more interested in power generation -- their population is expanding, their income level is going up, they use more electricity -- and we’re going to have to make sure that we’re the guys who are selling them the technology and the know-how to make sure that they’re getting the power that they need.
In fact, just yesterday, our administration determined China wasn’t playing fair when it came to solar power. And so we took the first step towards leveling the playing field, because my attitude is, when the playing field is level, then American workers and American businesses are always going to win. And that’s why we’ve got to make sure that our laws are properly enforced."
The Coalition for American Solar Manufacturing (CASM)
“Today’s announcement affirms what U.S. manufacturers have long known: Chinese manufacturers have received unfair and WTO-illegal subsidies,” said Steve Ostrenga, chief executive officer of Helios Solar Works in Milwaukee, Wis., a founding manufacturer of CASM. “We appreciate the Commerce Department’s hard work in bringing these subsidies to light, and we look forward to addressing all of China’s unfair trade practices in the solar industry.”
In 2010, the U.S. Department of Energy estimated that the Chinese government provided its manufacturers with more than $30 billion in subsidies. As a result of China’s subsidies as well as its industry’s dumped pricing, CASM contends, at least 12 domestic producers have undertaken layoffs, gone bankrupt or closed plants in all regions of the country over the past two years.
“If we address unfair trade practices in the U.S. solar market, we can get back to our business of expanding American manufacturing and jobs in the renewable energy sector,” said Carlo Santoro, director of business development at MX Solar USA in Somerset, N.J., a founding manufacturing member of CASM. “We look forward to getting back to the fair and legal competition that serves everyone best.”
SEIA (The Solar Energy Industries Association)
Rhone Resch, president and CEO of SEIA, said in a release, "It is important to note that this is a preliminary determination and the anti-dumping decision will be rendered in May. If the tariffs remain at these levels, we do not think that this will have a material impact on the U.S. market."
Resch added, "The trade action against Chinese imports is indicative of a growing trend of trade conflict in the global solar energy industry that threatens to curtail the rapid growth we have seen in this market -- both in the U.S. and abroad. Governments and industry must recognize that while trade remedy proceedings such as anti-dumping and countervailing duty investigations are an important part of the global trade rules, so too are collaboration and negotiations. This is why SEIA is taking a proactive lead to create a dialogue with several leading national solar trade associations and governments from around the world."
Suntech Power Holdings
"This initial decision reflects the reality that Suntech's global success is based on free and fair competition. Nonetheless, unilateral trade barriers, large or small, will further delay our transition away from fossil fuels at a time when the majority of Americans demand cleaner and more secure energy such as solar," said Andrew Beebe, Suntech's Chief Commercial Officer."
"As a global company with global supply chains and manufacturing facilities in three countries, we are well prepared for the future. Regardless of whether tariffs are imposed on solar cells from China, we can provide our customers in the U.S. with hundreds of megawatts of high-quality and affordable solar products that are not subject to tariffs. As a local manufacturer with production in Arizona, we will continue to remain an active member of the American solar industry and maintain focus on making solar energy affordable for everyone, everywhere," continued Beebe.
Jigar Shah, President of the Coalition for Affordable Solar Energy (CASE)
Today’s preliminary determination by the Department of Commerce imposing low tariffs on imported crystalline solar cells/modules from China, will, by itself, have a limited negative impact on the U.S. solar industry and its 100,000 employees. It also demonstrates that the Commerce Department did not find the Chinese government engaged in massive subsidization, as SolarWorld and CASM claim.
But before we can rest easy, there will be another, and what is likely to be, a much bigger shoe that will drop when the Commerce Department announces anti-dumping duties in May.
As we have stated before, imposing high tariffs would undercut President Obama’s effort to expand renewable energy just as solar power is realizing unprecedented growth and competitiveness in the marketplace.
This is an initial victory for America’s solar industry and its 100,000 employees.
Yingli Green Energy
"As we stated in our testimony to the International Trade Commission, we are not dumping, nor do we believe that we are unfairly subsidized," said Robert Petrina, Managing Director of Yingli Green Energy Americas. "We will continue to fight for affordable solar energy and further growth of the tens of thousands of U.S. solar jobs that we help to create. Regardless of the outcome of this proceeding, we remain dedicated to the U.S. solar market."
Today's preliminary decision on the anti-subsidy side will be followed by another preliminary decision for anti-dumping, scheduled for May 16, 2012. No final tariff decisions will be made until the International Trade Commission completes its investigation as well, which is scheduled to occur before the end of 2012.
"The important thing to remember is that tariffs are bad for the entire solar industry," said Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy. "We will continue to support the U.S. as an important solar market, and believe that global trade and fair competition will persevere. Today's decision validates that."
CAP (Center for American Progress)
Today’s Commerce Department decision to levy import tariffs on Chinese solar panels is a positive step forward in a much larger effort to level the clean energy playing field between the United States and China. I applaud SolarWorld for pursuing this case and utilizing the trade institutions designed to address these types of complaints. Too many U.S. companies avoid filing trade petitions because they fear Chinese government retaliation. When U.S. companies allow those fears to prevail, the end result is tacit accommodation to illegal trade behavior, and that can erode U.S. competitiveness and drive entire U.S. industries out of business.
This countervailing duty (subsidy) tariff is lower than many industry analysts expected. It is important to note, however, that in trade cases where subsidy and dumping petitions are filed in tandem, the dumping tariff is generally the higher import duty. The Commerce Department is expected to issue the SolarWorld dumping determination in May. At this point, it is far from clear what the end result of this case will be and how it will impact manufacturers in the United States and China.
One thing that we can say based on this relatively low tariff is that the Commerce Department did not apply punitive duties in this ruling. Instead, the Commerce Department based this decision on its own review of the evidence and only levied tariffs based on what it could prove. Chinese companies and officials are watching this case very closely, and hopefully this action will serve as an example in China for how these cases can and should be handled impartially and according to law.
The United States and China are the world’s biggest energy consumers. Keeping our borders open to allow and encourage clean energy trade can stimulate competition, speed innovation, and bring down costs to speed our transition toward a clean energy economy. To be equally beneficial for both countries, however, it is critical that U.S. and Chinese companies compete on a level playing field. At present, it is clear that the field is often far from level. Allowing and encouraging U.S. companies to file trade petitions such as this one is critical for correcting that imbalance.
These tariffs are designed to counteract government subsidies in China that artificially suppress Chinese manufacturing costs and give Chinese solar panels a pricing advantage in the U.S. market. Today’s announcement is the first of two long-awaited tariff verdicts on two trade petitions filed last October by SolarWorld Industries America Inc. A Commerce Department decision on the second trade petition (dumping) is expected in May, and the May ruling could substantially increase the cumulative import tariffs levied on Chinese solar panels in the United States.
Oregon Senator Jeff Merkley
“American workers can compete with anyone in the world when we have a fair playing field. Unfortunately, China’s subsidies have distorted the solar panel market and cost Americans good manufacturing jobs. This ruling will begin the process of making China play by the rules, enabling our businesses to compete on a level playing field.”