Yesterday the U.S. Department of Commerce announced that it would impose preliminary countervailing duties (CVD) on Chinese-manufactured solar modules in an effort to close the loophole that was created when it imposed initial tariffs on Chinese-manufactured solar cells back in 2012.

In 2012, the DOC started imposing tariffs on Chinese-made cells and ingots. In an effort to avoid the tariffs, the manufacturers reportedly moved cell manufacturing to Taiwan but continued to manufacture modules in China. These new duties will now be imposed on modules. 

The International Trade Administration released the chart below showing how much the duties will be for which manufactures.  In all they range from 18 to 30 percent.

Preliminary Findings

Though the findings are preliminary, the DOC will immediately begin collecting the duties until the final determination is made. Commerce is expected to announce a final determination on or near August 18, 2014. Following that announcement, the ITC will make its final determination on or near October 3, 2014. If both are affirmative, the CVD will stick. If either one is negative, no CVD order will be issued.

The sole petitioner in the trade case is SolarWorld who alleges that the Chinese government unfairly supports its solar manufacturers, creating an unfair playing field for the global solar marketplace. 

The U.S. solar energy industries association (SEIA) reacted negatively to the news, calling it “damaging” and stating that the tariffs will slow the adoption of solar in the U.S. by raising the cost of solar for American consumers and businesses. SEIA president Rhone Resch further slammed the petitioner. “Ironically, the tariffs may provide little to no direct benefit to the sole petitioner SolarWorld, as we saw in the 2012 investigations,” he said.

SEIA said that it has been trying to facilitate conversations between SolarWorld and Chinese solar manufacturers for some time in an effort to “jump-start” government to government negotiations but that “we’re quickly running out of time.”

“It’s time to get serious about resolving this ongoing dispute, before irreparable damage is done to the U.S. solar industry,” said Resch.

China Reacts

Not surprisingly, China is not happy about the news. The Chinese solar PV industry released a statement indicating that it was “dissatisfied” with the findings.  An official said on the Chinese Commerce Ministry’s website that “[the ruling] won’t solve the problems of the U.S. solar industry.”

The duty imposed on Wuxi Suntech is “completely unfair” as the panel maker doesn’t receive subsidies from the Chinese government, Chief Executive Officer Eric Luo told Bloomberg today. While Suntech shares U.S. concerns over price declines in the industry, trade disputes are contributing to the greater problem of overall “industry instability,” Luo said in an e-mailed statement.

Trina Solar said that the allegations are “unfounded” and told Bloomberg that it “welcomes any opportunity to continue a constructive approach to a dialogue.”

“The tariff would not only hurt Chinese manufacturers, but also hamper the competitiveness” of solar power in the U.S. as the cost of power generation will rise, Sebastian Liu, investor relations director with JinkoSolar Holding Co., the best-performing Chinese solar manufacturer in the past year, said in a phone interview with Bloomberg today. The company is discussing the situation with its lawyers, he said.

The U.S. is separately investigating allegations that Chinese and Taiwanese producers dumped solar products below cost. Its preliminary ruling is expected on July 25, according to Bloomberg BNA.

RenewableEnergyWorld.com has plans to speak with international trade relations expert John Smirnow of SEIA about this issue later this month during PV America.  Stay tuned for updates as they unfold.

Lead image: Made in China on Blackboard via Shutterstock.

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