China to Slap anti-subsidy Duties on U.S. Solar Material

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China’s Commerce Ministry announces 6.5% tarrif on U.S. polysilicon. The tariff comes on top of the existing anti-dumping duties of 53.3-57% on U.S. polysilicon announced earlier this year.

On Monday, September 16th, 2013, China’s Commerce Ministry announced that it would impose a 6.5% tariff on imports of U.S. solar-grade polysilicon, a raw material used to make solar panels. The tariff, described as a preliminary anti-subsidy duty, comes on top of the existing anti-dumping duties of 53.3 to 57% on U.S. polysilicon announced in July this year.

The anti dumping duties announced in July were seen by many as a bid to protect China’s struggling domestic industry, and Washington called these duties disappointing. The anti-subsidy duty announced last Monday is likely to increase trade tensions between the United States and China.

Chinese business lobbies have been a major force pushing the Chinese ministry of Commerce to restrain polysilicon imports. According to industry data, of the 76,480 metric tons of solar-grade polysilicon consumed in China in Q1 and Q2 2013, 63% was imported. Company executives say solar panel manufacturers in China prefer imported polysilicon due to its higher purity that helps in energy conversion.

From September 20th, 2013, importers of polysilicon from Hemlock Semiconductor Corp and AE Polysilicon Corp will have to pay the duties. Other companies, including REC Solar Grade Silicon, REC Advanced Silicon Materials, and MEMC Pasadena, are not subject to the anti-subsidy duties because they have not received subsidy or the rates were too low, according to China’s Commerce Ministry.