US-China Solar Panel Conflict Reaches Next Stage

The US Commerce Department will begin imposing duties on solar panel imports from China, after finding that Chinese solar manufacturers receive unfair government support. Though the announced duties were far below the complainants’ requests, the decision is still expected to increase trade tensions between Beijing and Washington, which have already been running high in recent weeks.

The 20 March announcement came in response to an October complaint from the Coalition for American Solar Manufacturing (CASM), a group of seven solar panel manufacturers led by SolarWorld Industries America that had together petitioned the US to investigate Chinese solar imports in October 2011.

Tuesday’s decision specifically named Chinese manufacturers Wuxi Suntech Power Co. Ltd. and Trina Solar Energy Co. Ltd., imposing a 2.9 percent countervailing - also known as anti-subsidy - duty on the former and an initial 4.73 percent countervailing duty on the latter.

All other Chinese exporters will encounter a preliminary 3.61 percent rate, according to the Commerce Department. The granted countervailing duties stand in stark contrast to earlier predictions, which had indicated that duties could reach up to 30 percent.

The duties announced yesterday do not immediately go into effect; rather, they must be confirmed both by Commerce and the International Trade Commission (ITC) by 19 July. The upcoming process will be characterised by complex market investigations.

If the final determinations are affirmative, the US may enforce the duties as of 26 July.

Chinese companies will then have to pay these duties going forward, as well as retroactively for 90 days in order to keep exporting to the US.

The case had split the US solar industry, pitting solar panel producers against firms that buy solar panels for use in solar energy projects.

The price of solar panels has dropped 40 percent between 2006 and 2011, a result partly attributed to inexpensive panel imports from China. The drop in market prices has, in turn, been blamed by some analysts for the high-profile collapse of three US-based solar companies, particularly Solyndra, a California-based solar panel manufacturer.