China's Ministry of Commerce on January 20 imposed punitive five-year duties as high as 57 percent on imports of polysilicon – the raw material for solar photovoltaic (PV) cells and modules – from U.S. and South Korean manufacturers.
An association of U.S. solar energy installers, producers and other businesses that employs some 25,000 Americans, the Coalition for American Solar Manufacturing (CASM) is protesting China's trade action, asserting that the Chinese government's action is in retaliation for the U.S. imposing illegal subsidies and anti-dumping tariffs on imports of PV modules made in China, a complaint that was initially filed by CASM's founding and lead member, SolarWorld Americas in October 2011.
Trade disputes erupt amid booming solar energy growth
Growing at above-average rates, international trade in solar energy technology and equipment has been booming for well over a decade, supported by a variety of incentives and subsidies offered by governments, including the European Union, the U.S., China and India.
Those subsidies have been the source of a growing number of international trade disputes in recent years, particularly between China, the world's predominant manufacturer and exporter of solar PV cells and modules, the E.U. and U.S., the two largest importers of Chinese PV cells and modules.
According to CASM, the Chinese government has imposed the tariff on U.S. polysilicon imports “to divide U.S. finished-products manufacturers against polysilicon manufacturing suppliers, punish the U.S. government's adjudication of SolarWorld's cases in favor of the domestic industry and increase leverage for all manner of trade issues with the U.S. government.”
In addition, the Chinese government not only continues to illegally subsidize Chinese solar manufacturers, CASM says, it has stepped up its financial support in order to stave off defaults and failures and save jobs in companies that, up until recently, have been among the world's largest manufacturers of PV cells and modules. According to a CASM press release,
“U.S. solar-panel manufacturers continue to suffer layoffs, bankruptcies and other harms and China keeps propping up its own producers as both industries suffer from China's steps to designate the industry as a strategic target within its Five-Year Planning Process, support its industry with export-directed subsidies, trigger enormous factory overcapacity, price products below production costs in the U.S. market, harvest U.S.- taxpayer-funded solar incentives and enjoy access to the U.S. market, including military bases, while keeping its borders closed to foreign competitors.”
China's solar trade action violates international law, according to CASM. “China keeps flooding the U.S. market with state-underwritten solar products that increasingly are cited as the source of sharply higher defect rates,” CASM states. “China's precipitous industry entry and the ensuing rise in faulty panels came in the wake of America's decades of pioneering and optimizing the industry.
"China's retaliation against the U.S. industry violates international trade rules," Mukesh Dulani, SolarWorld Industries America's president was quoted as saying. The company, a subsidiary of Germany's SolarWorld AG, has been the largest manufacturer of PV cells and modules in the U.S. for over 35 years. "Time and time again, these retaliatory cases have been found to be without merit."