U.S. Burdens Chinese Solar Panel Manufacturers with Anti-Dumping Tariffs

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By Sofia Liska

May 22 – The U.S. Commerce Department has imposed tariffs of 31 percent to 250 percent on Chinese solar panels, upsetting American solar panel installers, Chinese solar panel manufacturers, and Chinese officials. In doing so, the U.S. government effectively sided with solar panel manufacturer SolarWorld Industries America, who claimed that Chinese companies were dumping their under-priced and illegally subsidized solar panels onto the U.S. market.

The United States had already imposed a tariff in March of between 2.9 percent and 4.73 percent in order to offset the illegal government subsidies received by Chinese solar panel manufacturers, but American solar panel manufacturers were not satisfied.

The United States placed the tariffs in an effort to protect American companies who could not compete with Chinese companies such as Suntech Power Holdings Co., the largest solar panel producer in the world, and Trina Solar Ltd.

Ben Santarris, a company spokesman from SolarWorld Industries America told the New York Times that they “consider this a bellwether case. It underscores the importance of manufacturing to the U.S. economy.”

There are two levels of tariffs. The first level applies to 61 exporters including Suntech Power Holdings Co and Trina Solar Ltd with a tariff of approximately 31 percent.

The second level would hit all other Chinese exporters not currently selling their panels in the Unites States with a 250 percent rate should they decide to start exporting to the U.S. market. The purpose of this higher rate is to prevent any of the 61 already flagged exporters from avoiding the tariff by moving their production to other companies.

China has denounced the move, labeling the U.S. implementation of anti-dumping tariffs on Chinese solar panels as unfair and warning that such actions send a “negative signal” about trade protectionism.

“The U.S. decision lacks fairness, and China expresses its strong displeasure,” Shen Danyang, a spokesman for China’s Ministry of Commerce, said in a statement posted on the ministry’s website. “By deliberately provoking trade friction in the clean energy sector, the U.S. is sending the world a negative signal about trade protectionism.”

U.S. installers are also concerned that the tariffs will actually harm the domestic solar industry by increasing panel prices and deterring interest. A report from the Solar Foundation, an advocacy group, shows that last year over 50 percent of jobs in the American solar industry were in installation, while about a quarter were in manufacturing.

“This decision will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity,” Jigar Shah, president of the Coalition for Affordable Solar Energy, which is against the tariffs, told U.S.A. Today.

A study made by the same coalition prior to imposition of the tariff said that a 50 percent tariff would cause the loss of 14,000 jobs in the United States.

The U.S. Commerce Department will make their final decision regarding the tariff in the fall.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, India, Singapore and Vietnam. For further information, please email china@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.

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