* Latest salvo in U.S.-China trade disputes
* Duties on most Chinese imports set at 31 percent
* Some could face tariffs of 250 percent
* Follows more modest March duties
* Chinese solar shares slide
By Matt Daily
May 17 (Reuters) – The United States hit Chinese solar
companies with punitive import tariffs of 30 percent or more on
Thursday, ruling they had dumped cut-price solar panels into the
U.S. market.
In the latest salvo in a series of ongoing trade disputes
between Beijing and Washington, the U.S. Commerce Department
said it sided with U.S.-based solar companies who had complained
a wave of Chinese imports had wrongly undercut their pricing and
forced several renewable players out of business.
With Thursday’s move, Washington set tariffs on shipments
from most of the top Chinese exporters, including Suntech Power
Holdings Co Ltd and Trina Solar Ltd, at about 31
percent.
Several of the Chinese companies and a solar trade group
opposed to the tariffs denounced the duties, and said they would
drive up costs for the clean energy source, stunting its fast
growth.
The new tariff was “a heavy blow to America’s solar
industry,” Jigar Shah, head of the anti-tariff Coalition for
Affordable Solar Energy, told Reuters.
Shah said he hoped the tariffs would be reduced before they
are finalized later this year, since they would likely cost
thousands of jobs in the nascent industry.
The new U.S. ruling stems from a complaint filed last
October by SolarWorld USA, a subsidiary of Germany’s SolarWorld
AG, and six other U.S. companies which alleged unfair
competition and had sought duties well above 100 percent.
China will criticize the move, according to White & Case
trade attorney Scott Lincicome, “but it’s unlikely to further
enflame bilateral trade tensions because high anti-dumping
duties were widely expected.”
China’s solar companies, which hold more than 60 percent of
the global market, have largely relied on subsidized markets in
Europe and the United States in recent years for purchases of
their products, prompting criticism that huge loans from Chinese
state-run banks and low-ball pricing gave the Chinese companies
an unfair advantage.
Under the decision, 59 Chinese solar companies that
petitioned the U.S. government in the case will also face an
import duty of about 31 percent, including Yingli Green Energy
, LDK Solar, Canadian Solar, Hanwha
Solar One, JA Solar Holding and Jinko Solar
.
Other Chinese companies could now face a 250 percent tariff,
although those levels could be altered before the final ruling
from the Commerce Department is issued in the coming months.
“Today, SolarWorld and the many industry players who embrace
the sustainable efficiency gains and price declines that come
from fair competition can take heart that the U.S. government is
standing up against Big China Solar,” Gordon Brinser, president
of SolarWorld Industries America, said in a statement.
The U.S. ruling, retroactive to cover imports dating back 90
days, comes two months after Washington set more modest tariffs
on imports from China because of what it deemed Beijing’s unfair
support for its solar industry.
Chinese solar companies and critics of the SolarWorld
complaint say global competition has been crucial to bringing
down the cost of renewable power, which still relies on
government subsidies to compete with fossil fuels such as coal
and natural gas.
Shares of U.S.-based solar companies rose on the news, with
First Solar Inc gaining 6.7 percent and Sunpower Corp
gaining 10 percent. Sunpower Corp was already rallying
after Apple Inc said it would use the company’s solar
panels for its solar farm.
U.S.-listed shares of Chinese solar companies dipped,
particularly Yingli Green Energy, which was off 13
percent, while Suntech dropped 5.8 percent and Trina fell 7.9
percent.
SPARRING ON TRADE
President Barack Obama, running for re-election in November,
has promised to crack down on what he said were unfair Chinese
trade practices. In March, Washington challenged China’s export
restrictions on critical “rare earth” industrial materials in a
complaint, together with the European Union and Japan, to the
World Trade Organization.
Chinese government officials have previously threatened to
impose trade duties on U.S. shipments of polysilicon, the key
material used in solar panels, if the U.S. moved to penalize
Chinese solar companies.
Solar panel prices tumbled by more than 50 percent since the
beginning of 2011 amid a glut of supplies triggered by declining
subsidies in Europe and rapid global growth in the production
capacity of solar wafers, cells and panels.
That steep solar price drop forced many companies in Europe
and the United States into bankruptcy and decimated the
once-lucrative margins across the industry.
Among those casualties was Solyndra, the California-based
start-up that shuttered its operations last year after taking
more than $500 million in U.S. loans, prompting criticism that
the Obama administration was favoring uncompetitive renewable
power.
Lawyers for SolarWorld have said Chinese exports of solar
cells and modules swelled to $2.8 billion in 2011 from $1.2
billion in 2010, exceeding even the sharp growth that saw U.S.
solar installations double last year.
Still, Chinese companies have not been immune to the pain.
Market analysts have said many smaller, less competitive Chinese
solar companies have closed, and share prices for Suntech,
Yingli and Trina have plummeted by more than 75 percent over the
past year.
