Tariffs on Chinese Solar Panels-Big Time
The decision that the solar industry has been waiting for was announced earlier today and it will not be an easy decision for the Chinese manufacturers to swallow. The Department of Commerce released a fact sheet summarizing the decision. In its dry language, "Commerce preliminarily determined that Chinese producers/exporters sold solar cells in the United States at dumping margins ranging from 31.14 percent to 249.96 percent." Some of the best know solar manufacturers such as Suntech and Trina Solar received preliminary dumping margins of 31%. It is one of the largest anti-dumping decisions in American history, according to The New York Times. Many predict that it will raise the cost of solar panels across the board.
As a result of this preliminary determination, Commerce identified next steps: "Commerce will instruct U.S. Customs and Border Protection to require a cash deposit or bond based on these preliminary rates, applicable to all entries of Chinese solar cells made up to 90 days prior to the date of publication of the preliminary determination notice." The New York Times in a bit of understatement reported that the decision will be "certain to infuriate Chinese officials."
In response, Chinese solar manufacturers may set up operations in other countries closer to some of their export markets, such as Canada. But, as the article in The New York Times points out, "they may face another obstacle: their bankers. State-owned banks have already lent heavily to the Chinese manufacturers under pressure from the government, producing a capacity glut in China that has prompted factories to slash prices as they fight to maintain market share.
Yingli Solar issued a press release, looking forward to the next battle: "'We will continue to aggressively defend ourselves and remain optimistic that we will persevere in the final determination,' said Robert Petrina, Managing Director of Yingli Green Energy Americas, Inc., the Company's operating subsidiary in the U.S. 'The overwhelming majority of the U.S. solar industry supports access to affordable solar energy and fair market trade. We are grateful to the tens of thousands of U.S. solar installers, developers, manufacturers, and suppliers who stand behind us today.'"
The winner of this latest battle was SolarWorld, a German company with a subsidiary in Oregon. The Associated Press quoted the president of the American subsidiary, undoubtedly celebrating the decision that the ruling "will re-establish a natural balance in pricing that does need to occur in the global marketplace." But the Associated Press presented the strident views of SolarWorld's antagonist, Jigar Shah, leader of the coalition that fought hard to oppose the imposition of the tariffs: "This is the first step to a trade war between the U.S. and China."