Commerce Department Puts Tariffs on Chinese Solar Panels, But Loophole May Render That Irrelevant
The Commerce Department imposed slightly lower but still robust tariffs on Chinese solar panels, alleging that subsidies undercut US prices and violate international trade laws.
The Commerce Department issued its final ruling Wednesday in a long-simmering trade dispute with China, imposing tariffs ranging from about 24 to nearly 36 percent on most solar panels imported from the country […]
The trade case stemmed from a legal filing nearly a year ago by a coalition of manufacturers, led by SolarWorld, a German company with considerable manufacturing in the United States. The coalition contended that Chinese companies, which dominate global sales with a two-thirds market share, were competing unfairly in the American market.
“This is another important step in returning the solar marketplace in the United States to fair competition,” said Timothy C. Brightbill, a lawyer representing the companies that brought the case.
The near-term result of this may be less solar panels for installation in the US, and if this truly damages the Chinese subsidy-based method and sends some of their manufacturers out of business (a remote possibility), around the world. In the long-term, US demand for solar will continue to grow, especially rooftop solar, and someone will fill the gap to manufacture the panels, probably right here in the US. In fact, it probably won’t come to this at all. The Commerce Department ruling was sufficiently narrow, such that Chinese firms can avoid the tariffs by shipping their panels to another country for a final component assembly. The Chinese would still produce the solar cells, but the panels would “come” from Germany or elsewhere. Most analysts feel that this won’t disrupt the solar market in a major way.
So the next step for greentech companies in the US is to get the Commerce Department to make some ruling on closing that loophole. Otherwise, this is a case of “green jobs-washing,” where Commerce looks like they are protecting US manufacturing without actually leveling the playing field at all.
There’s a good case to be made that Chinese subsidies have been a net positive for the renewable energy space. Wholesale prices for solar have dropped 75%, mainly because of China driving down labor costs and using economies of scale to reduce the cost of materials. But this does not factor in the use of technology and innovation to lower costs, which is already happening. Cheap solar will be with us regardless of China’s position in the market, in all likelihood. And anyway, this is theoretical unless Commerce closes the loophole.