Solar-equipment makers, including SolarWorld AG, are being harmed by imports from China, a U.S. trade panel found in the first step toward imposing added tariffs on those imports.
The U.S. International Trade Commission voted unanimously in Washington today in a preliminary ruling on the petition by Bonn-based SolarWorld calling for antidumping and countervailing duties. The commission will now proceed with a full investigation.
“It’s an incremental step, but it is a major step forward,” Gordon Brinser, the president of SolarWorld’s U.S. unit, said in an interview yesterday, anticipating the vote. “The ITC is saying there’s harm or a threat of injury.”
The Chinese government uses cash grants, raw-materials discounts, preferential loans, tax incentives and currency manipulation among tactics to boost exports of solar cells, according to SolarWorld’s Oct. 19 complaint to the trade commission and U.S. Commerce Department. SolarWorld, a maker of solar modules, is seeking duties to offset the practices.
The ITC is examining possible economic harm to SolarWorld from Chinese imports, while the department determines the penalty for Chinese companies that illegally dump products. The department may decide on preliminary remedies as early as January 12.
SolarWorld and six other companies that haven’t been publicly identified, have requested tariffs of 100 percent, saying Chinese solar manufacturers benefit from unfair government support.
The U.S. group asked the federal government to slap duties on more than $1 billion of Chinese imports.
Democratic lawmakers wrote a letter today to President Barack Obama urging an investigation into Chinese solar imports, which they say don’t fairly compete with domestic products.
Imports of Chinese solar products have more than quadrupled from 2008 to 2010, lawmakers wrote in the letter. Chinese imports control half the market, benefiting from government-provided loans, cheap land, tax breaks and an undervalued currency, the lawmakers, including Senator Ron Wyden, an Oregon Democrat, and Representative Edward Markey, a Massachusetts Democrat, said.
Representatives of Chinese companies told the commission Nov. 8 that tariffs sought by U.S. competitors would make it harder to expand the use of renewable energy. China and the U.S. are among nations encouraging use of alternative energy sources, driving costs down across the board, so it would be unfair to penalize China, they told the panel.
China responded to the initial probe by saying it would begin its own investigation into American state support for renewable energy. China’s Ministry of Commerce will consider the stimulus programs of the states of Washington, Massachusetts, Ohio and California, and two others in New Jersey, it said Nov. 25.
SolarWorld said Sept. 2 that it was cutting almost 200 jobs at its facility in Camarillo, California. Solyndra LLC, a California maker of solar panels that received $535 million in U.S. loan guarantees, blamed cheap Chinese imports for its collapse. Solyndra filed for bankruptcy on Sept. 6.
“There’s a serious concern going forward with the current situation,” Brinser said. “SolarWorld is a strong company, but others in the industry are struggling.”
Attorneys for Suntech Power Holdings Co. Ltd. and Trina Solar Ltd., two of the biggest China-based makers of crystalline silicon panels, told the trade commission Nov. 8 that added tariffs would increase the cost of solar panels, which would then be passed on to the consumer.
Chinese solar manufacturers have said they may shift manufacturing to other countries to avoid tariffs if they’re imposed.
Executives at four of China’s biggest solar-panel makers have said they don’t receive special treatment from the Chinese government and that they pay higher interest rates for loans than U.S. or European competitors.
SolarWorld has said that China’s rapid growth in solar products is possible only with government support as it seeks to push out U.S. competitors by selling products for less than cost.
“If they continue at the rate they are going, it’s not a sustainable situation,” Brinser said.
China provided $30 billion in credit to its biggest solar manufacturers last year, about 20 times the amount provided by the U.S., Jonathan Silver, executive director of the Energy Department’s loan program, told a congressional panel Sept. 14. Silver resigned on Oct. 6.