By Roy Hales
This article originally published on The ECOReport, and is reprinted with permission
The US International Trade Commission upheld the US Department of Commerce’s Decision, from December 16, by 5-0 vote for China, and 4-1 with regard to Taiwan. Anti-dumping duty rates of 52.13% and anti-subsidy rates of 38.72% will be imposed on most solar panels imported from China. Anti-dumping rates of 19.50% will be imposed on most solar cells from Taiwan, regardless of where the panels are assembled into panels.
Setback for the US Solar Industry
“Today’s decision represents a clear setback for the US solar industry. Yet despite punishing tariffs, and the market uncertainty they have created, our industry has been able to persevere so far in the face of needless and counter-productive litigation. U.S. solar manufacturing and services jobs continue to grow, while solar prices continue to fall,” said Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA)
He added, “Consider how much better, and stronger, the U.S. solar industry would be doing without hundreds of millions of dollars in added tariff costs. In all likelihood, the industry would be well ahead of its goal of installing 10 gigawatts (GW) of new solar annually. We’d also see a robust and growing U.S. polysilicon industry, shipping billions of dollars in exports and benefitting our economy. Instead, we’re now faced with U.S. polysilicon plant closures and layoffs. And through it all, SolarWorld has gained little to nothing from its short-sighted litigation.”
“It’s particularly troubling that U.S. trade policy is working to increase the cost of solar products through tariffs when we know that more affordable solar energy creates more American solar jobs,” said Jigar Shah, President of the Coalition for Affordable Solar Energy (CASE). “As shown in the data from the recent National Solar Jobs Census, falling module prices contributed to a 21.8% growth of solar employment in 2014, including a doubling of the installation sector since 2010, which is the largest source of domestic employment growth.”
Heard This Chicken Little Rhetoric Before
“We’ve heard this Chicken Little rhetoric before during the previous trade case when the Jigar Shah and others claimed tariffs would ruin the domestic industry. It wasn’t true then and I don’t believe it will be true for the entire industry now. A few companies that made bad bets might get hurt, but I am confident the industry will remain strong,” said Tim Brightbill, chief legal counsel to SolarWorld.
Some suggest these duties will only hurt US manufacturers, Chinese manufacturers will simply ship to less restrictive markets.
To which Brightbill responded, “In regard to the Chinese moving production overseas, we welcome the opportunity to compete against what can produce when playing under the rules of international trade, as opposed to trying to tip the scales as they have over the past several years.”
Mukesh Dulani, U.S. president of SolarWorld, issued a press release in which he said:
“Today’s decision confirms the facts set out in our initial filing, the commission staff report and our testimony at the agency’s November hearing in the case. Manufacturers in China and Taiwan used illegal trade practices that harm the U.S. industry.U.S companies, including SolarWorld, Suniva and Silicon Energy, thank the commission and its staff for its thorough investigation and fourth vote to uphold American trade laws.”
SEIA’s Proposed Settlement
The origins of this conflict go back to 2011, when massive numbers of inexpensive Chinese modules were dumped into the US market. The US division of SolarWorld and six other manufacturers filed a complaint about unfair business practices. Today’s decision is SolarWorld’s tenth consecutive victory in this case. According to Minnesota Senator Rick Nolan, in the meantime twenty American firms have also gone out of business or been forced to make significant cutbacks.
The Solar Energy Industries Association brought forward a proposal, which they hoped would lead to a negotiated settlement, in September 2013. Some of the highlights, taken from their website, include:
- Chinese companies would agree to create a fund that would benefit U.S. solar manufacturers directly and help to grow the U.S. market. Money for the fund would come from a percentage of the price premium Chinese companies are currently paying to third-country cell producers to get around U.S. trade sanctions, reducing costs and supply chain distortion for Chinese companies.
- The Chinese government would also agree to end its antidumping and countervailing duty investigations on U.S. polysilicon exports to China, and remove the threat of artificial cost increases in a key raw material in the solar value chain, benefiting not just Chinese solar companies but all users of solar energy.
- In return, the U.S. antidumping and countervailing duties orders would be phased out.
- The proposal also calls for a safeguard mechanism designed to offset any surge of Chinese solar modules into the U.S. market.
Three Conditions Must Be Met
Brightbill said “SolarWorld is open to constructive negotiations,” but three conditions must be met:
- Any proposed agreement must be verifiable and enforceable.
- The proposed agreement must eliminate China’s unfair trade practices.
- The proposed agreement cannot be based on SEIA’s September 2013 proposal.
That third condition sounds “personal,” as do a number of undercurrents in this struggle. SEIA claims there is really one company behind this trade case. One of SolarWorld’s allies recently accused SEIA of looking after Chinese, rather than American, interests.
There are definite international influences in this debate. Some of SEIA’s board members come from US companies with Chinese affiliations. SolarWorld USA is the American division of a German company.
To what extent has solar manufacturing become an international rather than national industry?
Brightbill said, “There are elements of both. In some ways, the market is global. But in many other ways, it is still a regional or local market and will remain that way for many years. Also, even in an international industry, all companies must follow the global rules of trade.”
SolarWorld Is Proclaiming Victory
SolarWorld is proclaiming victory:
“Last night, in his State of the Union address, President Obama spoke about the need to promote the middle class, job creation and economic growth,” Dulani continued.
“American solar manufacturers have been doing their part by building or expanding facilities and hiring workers in states such as Oregon, Michigan, Ohio and New York. This additional capacity will help us meet the need in the market for American made solar. Today’s votes will allow us to move forward with additional certainty and will likely mean additional investment and hiring in the future.”
“Although these second cases have come to an end, there is stillmuch work to do,” Dulani added.
“We will continue to work with U.S. Customs and Border Patrol to ensure that U.S. trade laws are thoroughly and effectively enforced to prevent circumvention. We also want to take this opportunity to thank those who stood with us throughout the cases. They include Sen. Ron Wyden, members of the Coalition for American Solar Manufacturing and their more than 25,000 employees and, most importantly, the exceptional employees at SolarWorld, who have supported the company throughout both trade cases.”
The duties go into effect on February 1, 2014
(Top Photo Credit: Wafering process at SolarWorld Hillsboro Tuesday 3/15/11. © 2011 SolarWorld)