Features Business intelligence Contracting
China rejects US solar panel tariffs as protectionism, says they will hurt clean energy

Oct. 16, 2012 – China has demanded that Washington repeal steep tariffs on solar panels that Chinese producers fear will shut their equipment out of the American market.

Oct. 16, 2012 – China has
demanded that Washington repeal steep tariffs on solar panels that
Chinese producers fear will shut their equipment out of the American
market.

 

The tariffs upheld Wednesday by the U.S. Commerce Department add to financial
pressure on struggling Chinese solar panel manufacturers that are suffering
heavy losses due to weak demand and a price-cutting war, Chinese officials say.
 
"The United States is inciting trade friction in new energy and sending a
negative signal to the whole world about protectionism and obstructing the
development of new energy development,'' Ministry of
Commerce spokesman Shen Danyang said in a statement. It gave no
indication whether Beijing might retaliate.
 
`"We hope the U.S. side will correct its erroneous action with early
termination of the trade remedy measures,'' Shen said.
 
The Commerce Department upheld charges of 18 per cent to nearly 250 per cent on
Chinese solar panel producers to counter what it said was improper subsidies by
Beijing to the industry. For some companies, charges are lower than preliminary
tariffs announced in May.
 
A spokesman for one of China's biggest panel producers, Yingli Green Energy
Holding, said tariffs of about 30 per cent imposed on that company would
make sales to the United States unprofitable. He said gross profit margins in
the solar industry are about 10 per cent.
 
"A tax rate of 30 per cent is the same as 200 per cent. Both of them mean the
door is closed for exporting to the United States,'' said the spokesman, Wang
Shuai. "No one does business to lose
money.''
 
Yingli and other leading Chinese manufacturers including Suntech Power Holdings and Trina Solar have rejected accusations they were selling goods at
improperly low prices.
 
Foreign competitors complain Chinese solar manufacturers get improper
government support in the form of low-cost access to land, bank loans and other
resources. Beijing acknowledges giving research
grants and tax breaks but says those are in line with its free-trade commitments
and practices by other governments.
 
The dispute highlights tensions over whether China's government-dominated
economy should be treated as a free market. Beijing has pressed the United
States and Europe to officially grant such status, which would make it harder
to bring some dumping and other complaints, but none of its major trading
partners has agreed.
 
Trina Solar said earlier that solar cells or other components affected by the
duties could be replaced with components from other countries for shipments to
US customers.
 
In Yingli's case, though, Wang said all of its manufacturing is in China, which
means it cannot immediately replace U.S.-bound solar panels with products made
elsewhere.
 
The tariffs come at a critical time for Chinese solar panel manufacturers,
which have reported hundreds of millions of dollars in losses this year.
 
The Chinese solar panel industry grew rapidly over the past decade as Germany,
Spain and some other countries promoted renewable energy with subsidies and
low-cost loans.
 
China's communist leaders declared solar power, along with such fields as
biotechnology and aerospace, a "strategic emerging industry'' targeted for
development as part of efforts to transform China from a low-wage country of
farmers and factory workers into a creator of technology.
 
Hundreds of Chinese companies began producing solar panels, which flooded the
market and drove down prices to unprofitable levels.  Companies also face possible European trade
action.
 
In July, a group of 25 producers of solar gear including companies from
Germany, Italy and Spain filed an anti-dumping complaint with the European
Union.
 
The latest U.S. tariffs were imposed in response to a complaint by a group of
companies led by Oregon-based SolarWorld, the largest U.S. maker of silicon solar
cells and panels. Some American companies that opposed the probe warned China
might retaliate against U.S. suppliers.
 
Chinese solar equipment manufacturers warned earlier that sanctions could
result in a loss of American jobs because U.S. companies are both buyers of
Chinese products and suppliers of materials. They said Chinese manufacturers
spend some $2 billion a year to buy materials such as poly-silicon from U.S.
suppliers.
 
Beijing responded to the investigation by launching its own probe last November
into whether U.S. government support for producers of wind, solar and other
renewable energy technology is an improper
trade barrier.
 
In August, the Commerce Ministry ruled that U.S. support for six clean energy
projects violated free trade rules and called on Washington to stop but made no
mention of possible penalties.