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US Imposes Tariff on Chinese Solar Makers--But Is It Enough?

Posted By Jeff Moad, March 20, 2012 at 1:49 PM, in Category: Global Value Networks

The U.S. Commerce Department today said it will impose tariffs on some solar panels imported from China after concluding that the Chinese Government illegally subsidized exports in multiple ways.

The move, which had been requested last October by a coalition of seven U.S.-based solar manufacturers, will be seen by some as evidence that the Obama Administration is willing to get tougher on alleged anti-competitive trade practices by the Chinese government. On the other hand, the actual tariffs--ranging between 2.9% and 4.73%--were small, suggesting the move may be more symbolic than substantial.

The Coalition for American Solar Manufacturing, headed by SolarWorld Industries America Inc., alleged that the Chinese government has been heavily subsidizing export-focused Chinese solar makers with:

-  Massive cash grants
-  Discounted raw materials
-  Discounted land, power, and water
-  Prefferential loans and direct credit
-  Tax exemptions, incentives, and rebates
-  Export assistance grants and
-  Discounted export insurance

In its (petition to the DoC - Solar Wars: US-China Solar Energy Battle Heats Up), the coalition estimated the impact of these incentives justified a 100% tariff.

The allegedly illegal support from the Chinese government has had a big impact on the solar industry, driving down the cost of crystaline silicon solar cells and panels and devastating non-Chinese competitors. Imports of solar panels from China to the U.S. grew from $21.3 million in 2005 to $2.65 billion last year. According to the Coalition, seven solar plants in the U.S. have shut down over the past 18 months.

Do you see the DoC action as a hopefuls sign that the U.S. government is prepared to allegations of Chinese dumping and illegal anti-competitive behavior? Or is this too little, too late?

Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit


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