Another Battle in War Against China Solar, US Launches Fresh Probe

US officials have launched new investigations into Chinese and Taiwanese solar trade practices, in a move expected to rekindle tensions between Beijing and Washington.

The investigations announced by the US Commerce Department last Thursday come in response to a December petition by SolarWorld Industries America, the US’ largest solar panel manufacturer. The company claims that China has managed to exploit a loophole in a 2012 trade case by using cells made abroad, mainly from Taiwan, in its production process - in effect avoiding US anti-dumping and countervailing duties.

Dumping refers to the practice of selling goods abroad at prices below their normal value. Countervailing duties, meanwhile, are meant to combat allegedly unfair subsidies to producers, and are also known as anti-subsidy duties.

China’s Ministry of Commerce has urged the US to abandon the probe, and says it plans to follow the proceedings closely. Beijing will “resolutely safeguard our interests through various mechanisms,” the ministry said in a statement published by media outlet Xinhua.

SolarWorld was one of the main proponents of the case that led to the original duties. Following a year-long investigation, the US Commerce Department had announced in 2012 that they had found evidence of both dumping and illegal subsidies, and would be imposing duties on Chinese-made solar cells to counter both.

These new investigations will focus on imports of certain crystalline silicon photovoltaic products, which are the basic component of solar panels, modules, and/or laminates. In 2012, imports from China and Taiwan of these products were worth US$2.1 billion and US$513.5 million, respectively, according to US data.

As before, Chinese producers will be investigated for both dumping and unfair subsidies. Taiwanese producers will only face an anti-dumping investigation. The US International Trade Commission (ITC) will make its preliminary injury determinations by 14 February to determine whether the investigations will continue.

If the US ITC does find “reasonable indication” that such imports cause material injury to US producers - or threaten to do so - Commerce will then proceed with its investigation, and would announce preliminary countervailing determinations in March and its anti-dumping findings in June.

The EU had similarly sparred with the Asian giant over solar trade, with the two sides later coming to a “price undertaking” arrangement last year that resolved the disagreement. The US was not part of this final deal, despite Washington officials being involved in some of the early discussions.

China imposes duties on US, South Korean polysilicon

In a separate development, China’s Ministry of Commerce confirmed on Monday that it would be imposing anti-dumping duties on imports of US and South Korean solar-grade polysilicon, an ingredient used in making solar panels. Beijing had imposed provisional duties on these imports last July.

In the notice released on Monday, MOFCOM officials said that their investigation confirmed that there had been dumping of these products onto the Chinese market in the survey period, resulting in “substantial damage” to domestic industry. Furthermore, there is a “causal link between dumping and material injury,” officials said.

US producers are also set to face anti-subsidy duties on these products, the Chinese ministry said in a separate announcement.