U.S. Sets Duties on Solar-Energy Gear From China, Taiwan

The U.S. Commerce Department proposed expanded penalties on some Chinese solar-energy imports in a victory for the U.S. unit of SolarWorld AG (SWVK), which accused China of shifting production to Taiwan after it lost an earlier case.

The agency issued a preliminary finding yesterday that said overseas producers, including China’s Trina Solar Ltd. and Taiwan’s Gintech Energy Corp. (3514), sold the goods in the U.S. at unfairly low prices, a practice known as dumping. It called for duties ranging as high as 165 percent for some Chinese manufacturers and 44 percent for those in Taiwan, according to a department fact sheet.

“We should not have to compete with dumped imports or the Chinese government,” Mukesh Dulani, president of SolarWorld Industries America Inc., based in Hillsboro, Oregon, said yesterday in an e-mail. The Commerce Department’s actions “should help the U.S. solar manufacturing industry to expand and innovate.”

The SolarWorld case has split the U.S. solar-energy industry, with manufacturers seeking protections against being undercut by cheap imports, and installers pressing for low-cost equipment, regardless of origin. It’s also the latest spat between the U.S. and China, the world’s largest economies, which are vying to become the global base for clean-energy manufacturing.

Negotiation Urged

“We strongly urge the U.S. and Chinese governments to ‘freeze the playing field’ and focus all efforts on finding a negotiated solution,” Rhone Resch, president of the Solar Energy Industries Association, said in a statement. “This continued, unnecessary litigation has already done serious damage, with even more likely to result as the investigations proceed.”

A final decision by Commerce Department will be made in mid-December. The independent U.S. International Trade Commission will determine by the end of January whether U.S. makers of the solar-power goods were harmed by the imports. If so, the duties will be permanent.

U.S. imports from the two nations of the crystalline silicon photovoltaic cells, panels and modules used to make electricity from sunlight were valued at $2.2 billion last year, the Commerce Department said.

Officials from China’s Embassy in Washington didn’t respond to requests for comment. Taiwan’s economic office in the U.S. didn’t have a comment because the investigation involved Taiwanese companies, not its government, Frank Wang, a spokesman for the office, said in an e-mail.

‘Negotiated Solution’

Importers of Trina Solar’s goods will have to pay U.S. Customs agents a deposit of 11 percent on the goods, according to the Commerce Department. Those for Wuxi Suntech Power Co. will be subject to a duty of 14 percent. The agency’s fact sheet included a list of more than 40 Chinese companies that will be subject to the penalty tariffs. The department said a “China-wide entity” is subject to a 165 percent rate.

In the Taiwan investigation, the U.S. set penalties of 28 percent on Gintech’s goods and 44 percent on Motech Industries Inc. (6244) All other Taiwan producers are subject to a 36 percent rate.

SolarWorld won a similar U.S. case against Chinese producers including Trina Solar Ltd. (TSL) and Suntech Power Holdings Co. (STPFQ) in 2012. SolarWorld officials said that since the decision, China’s manufacturers have exploited a loophole by assembling part of the product in Taiwan to avoid penalty tariffs.

Attorneys for Chinese and Taiwanese producers have said SolarWorld is seeking to exclude from the U.S. market most imports of solar products that include crystalline silicon.

During the initial U.S. review, SolarWorld’s U.S. affiliates were a target of cyber-espionage by the Chinese military, the U.S. Justice Department said in charges unsealed May 19. The company has asked the Commerce Department to investigate.

Meanwhile, SolarWorld’s challenges to China’s trade practices continue. The Commerce Department in a preliminary finding on June 3 sided with the company by setting duties as high as 35 percent on the solar products from China after finding that the government in Beijing subsidized the goods.

The latest duties would be in addition to those penalties, if they become permanent. They apply to a broader set of goods than the 2012 sanctions.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net Justin Blum

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