March 20, 2012 9:29 pm
The Obama administration has imposed tariffs of up to 4.73 per cent on Chinese manufacturers of solar panel cells, judging that they benefited from unfair export subsidies after a review that split the US solar industry.
The level of tariffs set by the commerce department on Tuesday was lower than expected, but the move still marks the latest chapter in the Obama administration’s efforts to beef up trade enforcement against China.
A lobbying frenzy preceded the ruling on so-called “countervailing duties”, with some US solar companies arguing forcefully in favour of the tariffs to level the playing field with China. Others feared the punitive measures would lead to higher prices on the roughly $3.1bn in annual solar cell imports from China and damage the American solar sector.
In the end, the commerce department’s decision to apply tariffs but at a relatively low rate allowed both sides to claim a win. Jigar Shah, the founder of Sun Edison and chairman of the coalition that opposed the tariffs, said: “This is an initial victory for the American solar industry and its 100,000 employees ... With these low tariffs, they basically came out and said China is not over subsidising solar.”
But Steve Ostrenga, chief executive officer of Helios Solar Works and a member of the coalition that led the charge in favour of the duties, said: “Today’s announcement affirms what US manufacturers have long known: Chinese manufacturers have received unfair and WTO-illegal subsidies.”
The ruling on Tuesday imposed specific tariffs of 2.9 per cent on Suntech solar cells, and 4.73 per cent tariffs on Trina Solar panels. All other Chinese manufacturers of these products will be subject to a 3.61 per cent tariff. On Tuesday Peng Fang, chief executive of JA Solar, a Shanghai-based manufacturer, warned investors on an earnings call that the ongoing trade dispute could impact the company’s prospects.
“We are concerned about the increase of tariffs which may be introduced by the US Department of Commerce will disrupt trade with China well into 2013. Our US customers are looking for certainty [about] cost and the deliveries,” he said.
Mr Fang said the company had tried to satisfy US demand by arranging shipments from its “non-China manufacture base, through our partners or through our supply chain”.
The battle over Chinese solar exports to the US is not over. In May, the commerce department will make another determination on whether to impose anti-dumping duties on solar-panel makers as well, which could further hurt trade relations between the two countries.
Tuesday’s decision comes on the heels of a joint case filed by the US with the European Union and Japan to challenge China on its rare earth policy at the World Trade Organisation.
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