After reviewing the petition brought by SolarWorld, the U.S. Department of Commerce recently announced it will impose anti-subsidy duties against US imports of Chinese solar technology products and block state-sponsored Chinese solar producers from evading US duties on their solar panels by outsourcing production of photovoltaic cells to third countries, such as Taiwan.

Effective immediately, the Commerce Department imposed preliminary duties of 35.21 per cent on imports of panels made by Suntech Power, 18.56 per cent on imports of Trina Solar and 26.89 per cent on imports of most other significant Chinese producers. 

Mukesh Dulani, president of SolarWorld Industries America Inc., called the ruling a “strong win” for the U.S. solar industry, adding: “We look forward to the end of illegal Chinese government intervention in the US solar market, and we applaud Commerce for its work that supports fair trade.”

SolarWorld’s petition — which covers panels assembled in China from Taiwanese or third-country cells made from Chinese inputs — alleges that Chinese solar producers benefit from an array of government assistance, including cash grants, discounted loans and loan guarantees, free land and utilities, and heavily discounted polysilicon, solar glass and aluminum extrusions. 

In filing the petition, SolarWorld said it was acting with support from the Coalition for American Solar Manufacturing (CASM).  Many of CASM’s founding manufacturers, SolarWorld argues, are no longer in business or struggling to restructure.¹ CASM represents nearly 250 companies employing roughly 21,000 Americans.

Industry response 

Those companies named in the petition — and now set to face hefty duties — are clearly at odds with the ruling by the US Commerce Department.  

“The US ruling imposing a 35% duty on Wuxi Suntech is completely unfair, as our company receives no subsidy from the Chinese government,” said Suntech CEO Eric Luo. “Our ability to produce high-quality, low-cost PV modules stems from our highly efficient manufacturing process and from the scale of our supply chain.” 

As a leader of a company which was shaken up by the sudden drop in prices of solar modules, Luo says he can share his American competitors' concerns over extreme price declines. At the same time, he points to the need to highlight the greater risks of industry instability – to which the current trade disputes (in his opinion) are contributing.

“The real danger we're facing as an industry is not if a Chinese, European or American company goes bankrupt, but if the entire industry value chain collapses,” Luo explained. “China can manufacture high-end panels at truly competitive prices, but it cannot replace inexpensive, high-quality American silicon — or a talented American workforce, which would be the first to suffer from a spike in prices of solar energy."

Trina Solar, another compulsory respondent, faces lower duties than Suntech (18.56%), the lowest among the Chinese exporters. Still, the company says it is disappointed by the preliminary findings and believes the allegations made by SolarWorld are contrary to the principles of free and fair trade, and are ultimately unfounded. Furthermore, Trina Solar stresses that its transactions with all its customers in the United States are in accordance with international trade practices. 

In a written response, Trina Solar stated: “As a company, Trina Solar is dedicated to bringing the benefits of clean and innovative solar energy products and services to our customers around the world, and we remain committed to serving our many customers and business partners in the US, where we have built a solid and long-standing reputation for high-quality products and services."

The statement goes on to say: "With deploying the strategy prepared for further growing Trina Solar’s business in the US market, our competitive cost structure, our in-house manufacturing abilities, our brand and quality recognition in the market will provide us the competitive strengths not only amongst the Chinese solar manufacturers, but also globally. We believe we will continue to grow our business in US profitably, and we will continue to play an important role in the US market and serve our customers in the region.” 

Precedence set

Back in late 2012, the US crystalline silicon solar manufacturing industry won duties averaging 31 per cent to offset illegal government subsidies that enabled Chinese producers to sell at artificially low prices to seize market share from domestic manufacturers operating within the US market. But fair trade advocates say many Chinese producers evaded the duties by commissioning manufacturers in other countries to partially or fully produce solar photovoltaic cells for assembly into solar panels back in China. According to SolarWorld, state-controlled Chinese media said at least 70 per cent of US imports from China contain Taiwanese cells. To that end, SolarWorld filed cases on 31 December to close the loophole. 

Industry observers say more fallout is expected on July 25, when the Commerce Department is scheduled to announce anti-dumping duties in the aforementioned cases. 

1. In March, Sharp Solar was forced to shut down its manufacturing facility in Tennessee amidst aggressive import pricing pressure, among other competitive issues.