On March 20, the US Department of Commerce (DOC) announced a preliminary decision to impose countervailing duties ranging from 2.9 percent to 4.73 percent on solar cells and panels imported from China, much lower than the 100 percent punitive tariffs that US companies had asked for. This shows the joint plea by a group of 14 Chinese solar companies has paid off. However, as the DOC is also mulling anti-dumping duties on Chinese solar products, the level of combined punitive tariffs is uncertain.
At present, Chinese companies account for half of the world’s total solar cell shipments, with 90 percent of their products sold overseas, which is partly why the US anti-dumping and countervailing investigations into Chinese solar products have attracted worldwide attention. The DOC set preliminary countervailing duties at 2.9 percent for Wuxi-based Suntech Power Holdings, 4.7 percent for Changzhou-based Trina Solar, and 3.6 percent for all others.
SolarWorld and six other US solar manufacturers filed a trade complaint on October 19, 2011, calling for the US government to launch anti-dumping and countervailing investigations into Chinese solar products. The US International Trade Commission (ITC) and DOC launched the investigations on October 19 and November 8 last year respectively. The US manufacturers asked for 100 percent tariffs on Chinese solar products, in hopes of blocking Chinese rivals’ access to the huge US solar market.
In order to avoid the worst outcome, 14 Chinese solar manufacturers, including Suntech, Yingli Solar, and Trina Solar, have joined forces to defend their interests by providing strong evidence against the claim by US complainants. Analysts said that the DOC imposed much lower preliminary countervailing duties on the 14 solar manufacturers in spite of election pressure than on previously investigated Chinese state-owned companies probably because they are all private companies.
The China Chamber of Commerce for Import and Export of Machinery and Electronic Products said in a statement on March 21 that although the DOC accepted evidence provided by Chinese companies, it failed to see all facts about the production and overseas sale of Chinese solar products while making the unfair preliminary ruling.
The chamber called for the US government to correct its wrongdoing in future investigations, and said that Chinese solar manufacturers have received far less government support than their US competitors. All Chinese government support is in line with World Trade Organization (WTO) rules, and does not constitute prohibited export subsidies. If the US government sets up trade barriers against Chinese solar products, the development of the global solar energy market will be undermined, and US solar energy costs will increase sharply.
Li Lei, an attorney for the 14 Chinese solar manufacturers, said that the ITC issued a preliminary ruling in December last year confirming that Chinese trade practices were harming the US solar manufacturing industry.
The DOC is due to issue a final ruling on the countervailing duties on May 16, and will announce preliminary and final rulings on anti-dumping duties later this year. It may impose both countervailing and anti-dumping duties on Chinese solar products. However, whether the two duties will be officially levied depends on the ITC’s final ruling on around December 5 on whether Chinese trade practices are harming the US industry.
“The countervailing duties are relatively low, but it has nothing to do with the anti-dumping investigation, so it is hard to predict the level of combined tariffs,” Li said cautiously. Energy industry insiders estimate that the combined tariffs may range from 20 percent to 30 percent, which will place Chinese solar companies under heavy pressure and lead to their withdrawal from the US market.
