The United States on Wednesday set steep final duties on billions of dollars of solar energy products from China, but turned down a request from lawmakers and US manufacturers to expand the scope of its order.
Chinese solar manufacturers criticized the decision, adding more heat to the US-China trade relationship following a congressional panel report on Monday urging American companies not to do business with two Chinese telecommunications companies because of security concerns.
“Unilateral trade barriers will not make any one company more competitive, but will make solar less competitive against other forms of electricity generation,” said EL “Mick” McDaniel, managing director of Suntech America, a division of one of China’s biggest solar manufacturers.
The Commerce Department said Chinese companies were “dumping” solar cells and panels in the United States at prices 18.32 percent to 249.96 percent below fair value, although some individual companies received lower anti-dumping duty rates than in a preliminary decision earlier this year.
The department also set additional countervailing duties ranging from 14.78 to 15.97 percent to combat Chinese government subsidies, significantly higher than preliminary levels.
The United States imported about $3.1 billion worth of solar cells and panels from China in 2011, although that figure contains some product not covered by the investigation.
In a related decision that disappointed US producers and cheered US companies that install solar panels, the department turned down pleas to expand the scope of its order to include Chinese panels (or modules) made with non-Chinese solar cells.
Timothy Brightbill, outside attorney for SolarWorld Industries Americas, the driving force behind the US case, said the company would continue to aggressively pursue that issue in the hopes of a more favorable ruling.
“In our view, all Chinese cells and all Chinese modules are dumped and subsidized,” Brightbill said
SolarWorld is worried the department’s current stance on the issue will encourage Chinese solar panel producers to move cell production to nearby countries to avoid US duties, he said.
But Jigar Shah, president of the Coalition for Affordable Solar Energy, which includes Chinese and US companies that oppose SolarWorld’s case, said including panels with non-Chinese cells in the order would have “created a lot more chaos.”
The Commerce Department’s decision not to expand the scope is a “silver lining” to an otherwise disappointing decision on duties, Shah said.
Massive oversupply
The United States also has slapped preliminary duties on wind turbine towers from China and is expected to launch a new probe next week into charges that imports of Chinese hardwood plywood are unfairly priced and subsidized.
“We have the most squabbles with our biggest trading partners,” said Scott Miller, a trade policy specialist with the Center for Strategic and International Studies, explaining the steady stream of US-China trade spats.
In the solar sector, producers in the United States and Europe complain China’s rapid expansion of solar panel manufacturing has created massive oversupply, erasing profits and sending company share prices into a tailspin.
SolarWorld’s German parent has also been behind a charge in Europe for duties on Chinese solar panel imports.
China has warned that the US and European cases could damage trade ties and cripple development of the global solar and clean energy sector. It has already struck back by launching an investigation into imports of solar-grade polysilicon from both the United States and South Korea.
Chinese manufacturer Suntech Power Holdings on Wednesday was hit with a final anti-dumping duty of 31.73 percent and a countervailing duty of 14.78 percent.
However, combined duty rates for Suntech and other companies will be reduced by about 10.54 percentage points to avoid “double-counting” of Chinese export subsidies in the anti-dumping and countervailing duty rates.
Trina Solar received a final 18.32 percent anti-dumping duty and a 15.97 percent countervailing duty. Well over a hundred companies were hit with a 25.96 percent anti-dumping duty and a 15.24 percent countervailing duty.
The department also set a China-wide anti-dumping rate of 249.96 percent for other Chinese producers and exporters.
A separate US government agency, the US International Trade Commission, must give its approval for the duties to take force, although importers have been required to post bonds or cash deposits based on the preliminary rates.
The ITC vote is expected in early November.
The Obama administration has heavily backed solar and other renewable energy since taking office, pledging about $16 billion for 26 projects through its clean energy loan program.
Republican presidential challenger Mitt Romney has criticized the support, saying the federal government should not be in the business of picking winners and losers.
