The U.S. Commerce Department imposed tariffs of 31 percent to 250 percent on Chinese solar-product imports, siding with companies including SolarWorld AG (SWV) in the U.S. that said the items were sold below the cost of production.
The fees, announced today in an e-mailed statement, add to duties as high as 4.73 percent imposed earlier for getting unfair subsidies from China’s government. SolarWorld had asked for levies of more than 100 percent. Aaron Chew, a New York- based analyst at Maxim Group LLC, said before the decision that tariffs higher than 10 percent would be considered a victory for the U.S. companies.
“Commerce today put importers and purchasers on notice about the consequences of importing illegally subsidized and dumped products from China,” Gordon Brinser, the SolarWorld unit’s president, said in a statement.
The Commerce Department said a final determination on the tariffs would be made in early October. U.S. customs agents will collect a deposit or bond on solar cells made in China in the 90 days before today’s decision.
SolarWorld said its Hillsboro, Oregon-based U.S. unit can’t compete with Chinese exporters, including Suntech Power Holdings Co. (STP), the world’s largest solar-panel maker, and Trina Solar Ltd. (TSL) unless tariffs are imposed. Suntech was told to pay 31.22 percent, Trina’s levies were set at 31.14 percent and others were told to pay duties ranging from 31.18 percent to 249.96 percent.
U.S.-based solar-product companies rose in New York trading after the announcement. First Solar Inc. (FSLR) climbed 94 cents, or 6.7 percent, to $14.92, and SunPower Corp. (SPWR) added 51 cents, or 10 percent, to $5.59.
Opponents of the punitive tariffs, such as the Washington- based Coalition for Affordable Solar Energy, which includes Westinghouse Solar Inc. (WEST) and more than 100 other companies, claim the levies would cost U.S. jobs.
“These duties do not reflect the reality of a highly competitive global solar industry,” Andrew Beebe, Suntech’s chief commercial officer, said in an e-mailed statement.
President Barack Obama has been criticized for his support of solar-equipment manufacturers, including Solyndra LLC, with some Republicans in Congress doubting the industry can be profitable. The lawmakers are pushing Obama to take a tougher stance with China, citing a $295 billion trade deficit.
Higher Tariffs, Costs
High tariffs may raise costs, slowing demand for polysilicon that’s used to make solar panels, hurting U.S. companies that reported $2.6 billion in exports in 2011, including about $700 million to China, according to a study by Ken Monahan and Caitlin Webber, analysts for Bloomberg Government.
Sales of U.S.-made solar inverters, which convert electricity generated by solar panels, may also be cut, according to the report released May 15. U.S.-based firms produced about 45 percent of the inverters installed in the U.S. in 2010.
“Higher prices of solar panels may decrease U.S. demand, which may exacerbate the oversupply of polysilicon,” and reduce profit margins, according to the Bloomberg analysts.
Tariffs also may lead to China retaliating against U.S. polysilicon producers with its own protectionist measures, according to the report.
The U.S. solar industry’s production of polysilicon, polymers and manufacturing equipment may be at risk, according to Rhone Resch, chief executive officer of the Solar Energy Industries Association, a Washington-based trade group.
“If the U.S.-China solar-trade disputes continue to escalate, it will jeopardize these investments,” he said in an e-mailed statement.
Growing demand outside the U.S. for solar panels may offset losses caused by the tariffs, according to the Bloomberg Government report.
The prices of solar modules, or panels, fell 50 percent last year and continue falling, largely as a result of the cheap Chinese imports, Timothy Brightbill, an attorney for SolarWorld, said in an interview.
“A 50 percent price collapse has no relation to product improvement,” Brightbill said before the decision was announced. “It was all because of China’s massive overbuilt capacity and the flooding of the market with Chinese imports.”
In its initial determination on the subsidies, Commerce said Suntech should pay a 2.9 percent tariff and Trina should pay 4.73 percent. All other Chinese solar-equipment firms were told to pay 3.61 percent. The duties were retroactive for 90 days before the ruling.
The U.S. has also been jousting with China over market access for products including steel pipes, poultry, tires and music. Along with the European Union and Japan, the U.S. filed a complaint in March with the World Trade Organization challenging the Asian nation’s export limits on rare-earth minerals.
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