The U.S. Department of Commerce on Tuesday announced plans to impose new import tariffs on PV modules from China after concluding Chinese manufacturers had been unfairly benefitting from government subsidies.
The tariffs would range from 18.56% to 35.21%, the department said, adding that the U.S.’ countervailing duty law protects U.S. business and workers from "market distorting effects caused by injurious subsidization of imports into the United States" and establishes "a level playing field."
The duties are to be applied to both solar panels and cells. Earlier tariffs only covered cells. The U.S. imposed punitive duties on Chinese solar cells in 2012, but manufacturers were able to use a loophole that allowed them to bypass import tariffs by using non-Chinese solar cells in their panels. With its latest ruling, the Commerce Department aims to close that loophole.
The Commerce Department applied the varying duties to leading Chinese companies, calculating the lowest preliminary subsidy rate of 18.56% for Trina Solar. Wuxi Suntech and five of its affiliates would be hit with the highest preliminary subsidy rate of 35.21%. All other Chinese producers and exporters would receive a 26.89% rate.
"Because the government of China failed to respond completely to certain questions, we applied adverse facts available in determining that certain subsidy programs were countervailable," the Commerce Department said.
The department is expected to confirm the duties on or around August 18. They will then be reviewed by the U.S. International Trade Commission (ITC), with a final decision to be made around October 3.
The department is instructing U.S. Customs and Border Protection to require cash deposits based on the preliminary rates. If the duties are not confirmed, they will be repaid.
The countervailing duty investigation resulted from a petition filed by Oregon-based SolarWorld Industries America Inc., a subsidiary of Germany’s SolarWorld AG, which has led the anti-dumping and anti-subsidy campaign against Chinese crystalline silicon PV product on both sides of the Atlantic.
SolarWorld has maintained that Chinese manufacturers were unfairly benefiting from government subsidies and undercutting U.S. rivals by dumping their products in the U.S. at unfairly low rates.
In response to the move, the U.S. Coalition for Affordable Solar Energy (CASE) said it was "deeply disappointed" in the preliminary determination ruling on countervailing duties.
"The ruling is a major setback for the entire U.S. solar industry because it will immediately increase the price of solar power and cost American jobs in one of fastest-growing sectors of the U.S. economy," CASE added.
Speaking to pv magazine, Milan Nitzschke, president of European solar lobby group EU ProSun and SolarWorld’s marketing and communications chief, said the U.S. governments decision was "a clear bulwark against Chinese dumping. The previous Taiwan-cell loophole, which allowed Chinese solar modules to circumvent existing anti-dumping duties, has been plugged. This has finally brought us fair and free competition. Customers in the U.S. will again be able to choose between the best solar power products from around the world and not just dumped China modules."
Nitzschke added that the European Union could learn from the U.S. example. "While the Obama administration is effectively applying the rules of international trade, the last Merkel government did everything it could to prevent trade defense measures against Chinese dumping."
In an interview with German news magazine Spiegel Online published on Tuesday, SolarWorld founder and CEO Frank Asbeck said Chinese exporters continued to dump their products in the U.S. and accused manufacturers of ignoring anti-dumping regulations in the U.S. as well as Europe. "In the U.S., we have filed complaints against the circumvention of tariff measures. In the European market, modules are still offered far below those specified by the EU Commission’s fixed minimum price. There is evidence that Chinese manufacturers undermine the EU rules with various tricks."
Responding to the Commerce Department’s decision, Trina Solar on Wednesday said it was "disappointed by the preliminary findings and believes the allegations made by SolarWorld are contrary to the principles of free and fair trade, and are unfounded. Trina Solar’s transactions with all its customers in the United States are in accordance with international trade practices."