China Charges Protectionism in Call for Solar Panel Tariffs

The Chinese government Friday condemned a demand by the American solar panel industry for steep tariffs on solar panels shipped to the United States from China.

Lang Lang/Reuters

Assembling solar panels in China, which called the tariff effort a “lose-lose situation.”

China accused the American industry of protectionism that could undermine the global economy and harm international efforts to combat global warming. It called for the United States government to reject the industry’s legal filing.

In a carefully worded statement, the Chinese commerce ministry suggested that if the American government imposed import tariffs on Chinese solar panels, then China would purchase less American factory equipment and raw materials for making solar panels.

But the statement did not specify whether American exports would suffer because of deliberate retaliation by the Chinese government, or simply because Chinese companies would have less need for the equipment and raw materials if the United States market were to be partly or completely closed to them.

Either way, “the result is a lose-lose situation, and this will cause an adverse impact on the bilateral trade interests of the two countries,” the statement said.

A coalition of seven American companies filed the trade case against China on Wednesday. They accused Chinese manufacturers of obtaining billions of dollars in Chinese government subsidies to help them buy market share in the United States, and of dumping solar panels in the United States at prices that did not fully cover the cost of manufacturing and distributing them.

Their petition to the Commerce Department in Washington and a related federal agency, the International Trade Commission, seeks tariffs “well in excess of 100 percent” to offset dumping, plus additional unspecified tariffs to offset the suspected subsidies.

The coalition responded quickly to the Chinese criticism. “The Chinese government’s claims that our actions are improper and protectionist, and that its illegal subsidies and massive dumping of solar product are helping the global economy and the environment, are absurd,” said Gordon Brinser, the chief executive of SolarWorld Industries America, the lead company in the coalition. “China is one of the biggest trade protectionists in the world. In the solar industry, China is gutting manufacturing and jobs here in America and abroad while China’s solar industry pollutes its own people. The accusations have no basis in fact.”

The United States government has 20 days from the filing of the petition to decide whether to take the case, but the law gives it little discretion to reject it. A preliminary ruling is likely by March on the subsidies claim and by May on the dumping claim.

The Commerce Department and the I.T.C. must use narrow criteria set by Congress that give little discretion to either agency except on the question of whether a domestic industry has suffered significant injury from imports. The American solar panel industry has been laying off thousands of workers and closing factories. If the agencies pursue the case, final rulings could take six months or longer.

The Chinese ministry’s statement barely addressed the substance of the industry’s complaint, mentioning only in passing that Chinese policies were “in line with World Trade Organization rules.”

The ministry also made a clear plea for environmentalists to take its side.

“The development of the solar energy industry is a key measure of the Chinese government to address the challenges of climate change and energy security,” the statement said. “The United States has no reason to criticize other countries’ efforts to try to improve humanity’s environment — rather, it should join together with other countries to strengthen cooperation in the field of solar energy, and join together to face the challenges of climate change and the environment.”

So far, environmental groups in the United States have said little publicly in response to the solar panel trade case. Many environmental groups have advocated the creation of a strong American clean energy industry, which could improve the odds that Congress will continue to approve subsidies for alternative energy.

But many environmentalists also advocate the widest possible installation of solar panels as an alternative to burning fossil fuels. And toward that end, Chinese manufacturers have helped drive down the wholesale price of solar panels from $3.30 a watt in late 2008 to $1 to $1.20 a watt now.

The Chinese statement highlighted a study completed in August for an American trade group, the Solar Energy Industries Association, whose members include Chinese companies. The study calculated that the United States imported $1.4 billion worth of solar panels and other solar products from China last year, but exported solar factory equipment and raw materials valued at $1.69 billion to $1.98 billion to China.

But SolarWorld Industries America, the lead company in the trade filing against China, has pointed out that shipments of Chinese solar panels to the United States surged to $1.6 billion in the first eight months of this year. Meanwhile, American exports of factory equipment and raw materials have weakened as investment in Chinese factories has started to slow and as China has built its own industries to make these products.

Chinese companies are not the only ones unhappy about the American solar panel manufacturers’ case. Many American installers of solar panels are hostile. Mike Hall, the chief executive of Borrego Solar, a solar project developer based in Oakland, Calif., said, “One-hundred percent tariffs would have a massive effect, and the market in the U.S. would screech to a halt.”

World Trade Organization rules strictly ban the use of subsidies by a government to aid its export industries. W.T.O. rules also allow antidumping cases to be pursued within member countries, but do not encourage them.

The New York Times

This entry was posted in Renewable Energy and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s