Some question if China solar duties are too small to help U.S. manufacturers

The preliminary duties on Chinese solar imports by the U.S. Department of Commerce may make a statement that domestic manufacturers will be protected, but will probably do little else.

In fact, many observers say, at less than 5%, they aren’t big enough to have much of an impact at all, and most certainly won’t raise panel prices significantly.

On May 20, the department backed claims by seven U.S. firms that Chinese solar-panel suppliers had received unfair Chinese government subsidies. The department proposed relatively low countervailing duties of between 2.90% and 4.73% on the Chinese imports.

“The extremely low level of subsidization is surprising and undermines the Obama administration and industry claims that Chinese subsidies have crippled the U.S. solar industry,” said White & Case International Trade Attorney Scott Lincicome. “Although there’s still a long way to go before this case is finished, the decision will undoubtedly please the Chinese government and remove some of the sting from the new U.S. law on countervailing duties and ‘non-market economies.’” 

Gordon Brinser, president of SolarWorld Industries America Inc. and leader of the seven-manufacturer Coalition for American Solar Manufacturing (CASM) emphasized the positive parts of the decision.

“If fair international trade can be re-established, the solar-pioneering U.S. industry will once again compete on legitimate market factors such as product performance, production efficiency and unsubsidized pricing,” Brinser said. “We need both the domestic manufacturing and installation businesses to participate in fair competition to advance our solar industry’s reach for greater national energy, economic and environmental security.”

The anti-tariff Coalition for Affordable Solar Energy (CASM) saw less damage than it had feared, with tariffs perhaps as high as 100%.

“(The tariffs) are a relatively positive outcome for the U.S. solar industry and its 100,000 employees. However, tariffs large or small will hurt American jobs and prolong our world’s reliance on fossil fuels. Fortunately, this decision will not significantly raise solar prices in the United States as SolarWorld has sought,” said Jigar Shah, president CASM. “This decision clearly demonstrates that the Commerce Department did not find the Chinese government engaged in massive subsidization, as SolarWorld and CASM claim. The preliminary determination indicates the DOC’s intention to impose a duty of 4.73 % on U.S. imports from Trina Solar (NYSE: TSL), 2.9 % from Suntech (NYSE: STP), and 3.59 % from all other remaining Chinese manufacturers.

The trade group Solar Energy Industries Association (SEIA) does not see much impact if duties remain at this level.

“SEIA is supportive of a rules-based process for resolving trade disputes in the solar industry and the Department of Commerce’s investigation is certainly part of that process,” said Rhone Resch, president and CEO of SEIA. “It is important to note that this is a preliminary determination and the antidumping 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.”

There will be another decision in May when the Commerce Department announces anti-dumping duties.