US upholds high tariffs on solar panel imports

Chinese companies hope ruling can be reversed by ITC

The US Commerce Department has affirmed steep tariffs ranging from 18.32 percent to 249.96 percent on Chinese solar panel imports, finding that their production was made artificially cheap because of unfair subsidies from China's government, resulting in "dumping" in the US market.

For some of the Chinese companies, the anti-dumping tariffs are slightly lower than preliminary tariffs announced in May, but anti-subsidy duties imposed on these companies have more than tripled.

Wuxi-based Suntech Power was given a tariff of 31.73 percent, and Changzhou-based Trina Solar Energy received a tariff of 18.32 percent. Anti-subsidy duties of 14.78 to 15.97 percent were imposed on the Chinese producers.

Although the Commerce Department announced its final decision on Wednesday, the International Trade Commission is conducting its own investigations. If the ITC found that the Chinese manufacturers have not harmed the US solar-cell industry, it has the authority to reverse the ruling. It is expected to make its decision on or before Nov 23.

Some industry insiders said the tariffs could worsen already tense trade relations between China and the US.

"It will inevitably lead to a rhetorical rebuke from Beijing and a reminder that China is challenging US anti-subsidy policy at the World Trade Organization and in US courts," said White & Case international trade attorney Scott Lincicome, author of a new Cato Institute paper on US subsidy.

The tariffs ruling on China was brought on by SolarWorld Industries America Inc, a US subsidiary of German producer of photovoltaic cells and modules. Last October, SolarWorld filed a complaint to the Commerce Department, claiming that Chinese manufacturers were able to sell their goods cheaply using subsidies from their governments.

While making his case last week at a hearing conducted by the ITC in Washington, Gordon Brinser, president of SolarWorld's US business, claimed China's subsidies caused prices of photovoltaic cells and modules to fall sharply.

The company cannot compete "with the Chinese government or with the Chinese producers that fail to play by the rules", he told the commission.

Jigar Shah, president of Coalition for Affordable Solar Energy (CASE), said it was "a bad decision" to impose anti-dumping duties. The coalition was formed last year by a group of US solar developers and installers to oppose the duties.

"The tariffs will not help SolarWorld," Shah said. "Many of the Chinese mainland manufacturers are now importing solar cells from Taiwan, Malaysia and elsewhere." The tariffs only apply to solar cells and modules made in the Chinese mainland.

Marco Mangelsdorf, co-founder of ProVision Solar Inc in Hawaii which designs and installs rooftop solar-panel systems, said his business has been "hurt deeply" by the solar tariffs levied on China.

In June, he received a tax bill from US Customs, saying that he owed more than $138,000 for having purchased Chinese-made modules early this year. The penalty is 250 percent more than what he paid for his supply of panels from China.

"The tariffs are not good for anybody," he said. "The trade relationship between China and the US will definitely go down."

Some critics say that SolarWorld, the largest producer of solar panels in the US, has managed to build its business due largely to financial support from Germany and the US.

Barry Broome, president and CEO of Greater Phoenix Economic Council, said SolarWorld's claim is hypocritical and SolarWorld is heavily incentivized in its country.

Between 2003 and 2011, the German manufacturer received more than 137 million euros ($176 million) in government aid, according to the Center for Solar Research.

"They are not making money. It's their last shot to survive. The tariffs war is not about 'my subsidies are better than your subsidies'. We have to get the pricing down. That's the goal. If we get cheap solar, the community can benefit from it," Aaron Chew, a senior analyst at investment firm Maxim Group in New York.

Shah expresses hope for the Commission's final ruling in November.

"It's a very difficult case but I think the ITC will be more likely to side with our position."