US Commerce votes in favor of duties for Chinese PV manufacturers11. October 2012 | Top News, Global PV markets, Industry & Suppliers, Markets & Trends, Trade cases | By: Cheryl Kaften
The U.S. Department of Commerce (Commerce) has concluded that Chinese manufacturers have sold solar cells in the U.S. at dumping margins. Meanwhile, in the CVD investigation, duties will be retroactively applied to all Chinese photovoltaic cell and module imports that entered the United States beginning December 3, 2011.
Commerce has determined that Chinese producers and exporters have sold solar cells in the United States at dumping margins ranging from 18.32 to 249.96%. Commerce also determined that Chinese producers and exporters have received countervailable subsidies of 14.78 to 15.97%.
In the AD investigation, mandatory respondents Suntech Power Co., Ltd and Changzhou Trina Solar Energy Co., Ltd were assigned final dumping margins of 31.73% and 18.32%, respectively. Fifty-nine other Chinese exporters qualified for a separate dumping rate of 25.96%. All remaining Chinese exporters received a final dumping rate of 249.96%.
In the CVD investigation, mandatory respondent Wuxi Suntech Power Co., Ltd and ten of its affiliates were determined to have a final net subsidy rate of 14.78%. Mandatory respondent Changzhou Trina Solar Energy Co., Ltd was ascertained to have a final net subsidy rate of 15.97%, and Suntech, 14.78%. All other Chinese producers/exporters received a final net subsidy rate of 15.24%.
Commerce found that "critical circumstances" existed in the CVD investigation – meaning that duties will be retroactively applied to all Chinese photovoltaic cell and module imports that entered the United States beginning December 3, 2011.
In addition, Commerce found that critical circumstances exist in the AD investigation for all companies except Wuxi Suntech. As a result, provisional duty deposits – normally collected as of the date of publication in the Federal Register (May 25, 2012) of Commerce’s preliminary determinations – will be collected 90 days prior to that date from all companies except Wuxi Suntech. AD deposits applied to Wuxi Suntech will be due as of the date of publication of Commerce’s preliminary determination.
In order for this early duty deposit collection to be maintained, the U.S. International Trade Commission (ITC) must also reach an affirmative finding regarding critical circumstances on or before November 23.
As a result of the final AD determination, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect cash deposits or bonds equal to the applicable weighted-average dumping margins. As a result of the affirmative final CVD determination, Commerce will order the resumption of the suspension of liquidation and require a cash deposit equal to the final net subsidy rates, if the ITC issues a final affirmative injury determination.
In the CVD investigation, Commerce concluded that all producers and exporters benefited from an export subsidy ("export buyer’s credits"). Commerce, in accordance with the statute, is required to adjust AD rates to account for such export subsidies. In keeping with Commerce’s practice in investigations, Commerce will require cash deposits in the AD proceeding equal to the calculated dumping margins reduced by the appropriate export subsidy rate. Specifically, the required cash deposit rates will be equal to the calculated dumping margins reduced by 10.54%, the export subsidy rate.
The specific products covered by these investigations are crystalline silicon photovoltaic cells, and modules, laminates, and panels, whether or not they are partially or fully assembled into other products. Thin film cells were excluded from the inquiry, as were cells not exceeding 10,000 mm in surface area that are used in consumer electronics products.
The U.S. International Trade Commission (ITC) is scheduled to make its final determination on or before November 23. If the ITC makes an affirmative final determination that imports of solar cells from China materially injure, or threaten material injury to, the domestic industry, Commerce will issue AD and CVD orders. If the ITC makes a negative determination of injury, the investigations will be terminated.
For the purpose of AD investigations, dumping occurs when a foreign company sells a product in the United States at less than its fair market value. In CVD investigations, countervailable subsidies are financial incentives from foreign governments that are limited to their own industries; or are contingent either upon export performance or upon preference for domestic goods over imported goods.
However, there is one loophole: While modules, laminates, and panels produced in a third country from cells produced in the People’s Republic of China (PRC) are covered by these investigations; if modules, laminates, and panels are produced in the PRC from cells produced in a third country, they are not eligible for penalties.
Thus, Chinese manufacturers already have begun setting up shop in neighboring countries, including Japan and Korea, with an eye toward evading U.S.-imposed duties and penalties. Indeed, according to China Daily, at least five Chinese solar panel manufacturers — including Hebei-based Yingli Green Energy, Jiangsu-based Hareon Solar Technology Co and Changzhou-based Trina Solar — have had offices in Japan since the beginning of this year.
The Coalition for American Solar Manufacturing (CASM) – headed by SolarWorld Industries America of Hillsboro, Oregon, which originally brought the complaint – "welcomed parts of the U.S. Department of Commerce announcement regarding duties on Chinese solar cells and panels, but was very disappointed with other parts."
In a statement on its website, the group complained, "Commerce did not alter its preliminary determination on the product scope, which covered photovoltaic cells produced or assembled into panels in China – but not panels made from cells produced in third countries. SolarWorld's initial, broader scope had covered all cells and panels produced in China. This decision, according to CASM, leaves a significant loophole in the final ruling as it allows Chinese manufacturers to potentially avoid the duties by using non-Chinese cells in its solar panels."
The Coalition for Solar Energy – America’s solar installers and others in opposition to the complaint –responded with less animus than expected. Jigar Shah, president of CASE, stated, "We are gratified that the scope of today’s decision is limited only to solar cells made in China and that the department did not significantly increase the tariff from its preliminary decision in May … At the same time, we remain concerned about the growing global trade war, which will only hurt American solar industry jobs, growth and consumers."
Meanwhile, Rhone Resch, president and CEO of the U.S. trade group, the Solar Energy Industries Association (SEIA), commented, "While today’s decision rightly shows that the United States will protect its rights in the global trading system, we’re also learning that trade litigation, alone, is not enough to solve the complex challenges that exist between the United States and China. What is immediately clear is that for solar to thrive globally, there is a need to build consensus on acceptable forms of government support for industry."
Tom Gutierrez, CEO of Nashua, New Hampshire-based GT Advanced Technologies, which is a leading global provider of polysilicon production technology, told pv magazine, "Trade barriers in the form of protective tariffs will not improve the economics of the U.S. solar industry or change the way the Chinese do business.
"Other than starting a possible trade war with China, a key U.S. economic partner, this investigation has only made it more difficult for U.S. entrepreneurial companies like GT to export solar products abroad. The entire tariffs exercise is counterproductive to the primary objective of the U.S. solar industry: Accelerate the growth of this renewable source of energy here in the U.S. by rewarding companies that can successfully compete in the global market with sustainable business models and create good paying jobs for American workers."
The U.S. polysilicon industry already has been the focus of a possible retaliatory effort by the PRC, which has claimed that the United States is dumping silicon at below-market prices, to the disadvantage of Chinese manufacturers.
So, will a more level playing field enable U.S. solar manufacturers to gain ground, or will America’s "foul call" against China also weaken its own game plan? And will China now take steps to even the score? Those are the questions now remaining.
Edited by Becky Beetz.
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