July 28 (Bloomberg) -- Proposed U.S. tariffs on wind-energy towers from China and Vietnam were welcomed by a trade group that had complained competitors were dumping products in the American market.
The Commerce Department concluded in preliminary findings yesterday that producers in the nations, which exported $301 million in towers to the U.S. in 2011, sold the utility-scale goods below production costs. The department, which set duties as high as 73 percent for Chinese products and 60 percent for goods from Vietnam, acted on a complaint by U.S. companies such as Broadwind Energy Inc. of Naperville, Illinois. Broadwind rose 13 percent in trading yesterday.
“Commerce has taken an important step to address the significant dumping that is taking place,” Alan Price, an attorney with Wiley Rein LLP in Washington who represents the U.S. group, said in a statement. Duties will help to “force the Chinese and Vietnamese producers to compete fairly.”
The U.S. has imposed duties on numerous types of renewable-energy products from China in recent months, prompting retaliation in an escalation of trade tensions between the world’s two largest economies. President Barack Obama and Republican presidential candidate Mitt Romney have pledged stronger enforcement of trade actions against China, ahead of U.S. elections in November.
Officials from the Chinese and Vietnamese embassies in Washington didn’t immediately respond to a request for comment.
The Wind Tower Trade Coalition, a group of U.S. manufacturers, in December filed its complaint against Chinese producers with the Obama administration. The group also includes Otter Tail Corp.’s DMI Industries, Katana Summit LLC and a unit of Trinity Industries Inc., along with Broadwind.
Broadwind rose 4 cents to 30 cents in Nasdaq Stock Market trading. The shares are down 57 percent this year.
The anti-dumping measures for Chinese wind-tower exporters include a 21 percent duty for Titan Wind Energy Suzhou Co., according to a Commerce Department fact sheet. CS Wind Corp., Sinovel Wind Group Co. and Guodian United Power Technology Baoding Co. will be subject to duties of 26 percent. Chengxi Shipyard Co. received duties of 31 percent, and all other Chinese producers and exporters will pay the 73 percent rate.
CS Wind’s Vietnamese unit will be subject to a 53 percent duty, while all other manufacturers in the country received a 60 percent rate.
The Commerce Department will make a final determination for both nations on Dec. 16. In the meantime, U.S. Customs and Border Protection officers will collect duties based on the rates announced today.
“China has ramped up the wind-tower production and done it in a way that is not reflective of market forces,” said Scott Paul, the executive director for the Washington-based Alliance for American Manufacturing. “I’m hopeful these tariffs will give the American wind-energy manufacturers the breathing space to compete for more market space in the U.S.”
The Commerce Department on May 30 set duties as high as 26 percent on wind-tower imports from China to compensate for government subsidies, siding with U.S. manufacturers.
The U.S. imported about $222 million of utility-scale wind towers -- the steel structures that support engines and turbine blades -- from China last year, according to the agency. Similar imports from Vietnam were valued at $79 million.
The U.S. market for wind towers this year is valued at $1 billion and $1.5 billion, according to Amy Grace, an analyst for Bloomberg New Energy Finance in New York. If the U.S. production tax credit for wind energy expires at the end of the year as scheduled, those those figures may decline to $100 million to $400 million, she said in an e-mail.
In a separate action, the Commerce Department on May 17 set anti-dumping tariffs of 31 percent to 250 percent on imports of Chinese solar-energy products, after a complaint by manufacturers including the U.S. unit of SolarWorld AG. The agency in March announced duties of as much as 4.73 percent to offset subsidies received from China’s government, and last month determined that the country’s producers benefited from additional state support. A final ruling on those duties is scheduled for October.
In a complaint May 24 to the Geneva-based World Trade Organization, China’s Ministry of Commerce said renewable-energy programs in California, Massachusetts, New Jersey, Ohio and Washington state violate global trade policies. The nation has also said it filed a complaint at the WTO, alleging that U.S. anti-subsidy duties undercut $7.3 billion in Chinese products including solar panels.
To contact the editor responsible for this story: Jon Morgan at email@example.com