Tariffs on solar panels advance
Action against Chinese products could be limited due to loophole
The U.S. government cleared the way Wednesday for imposing steep tariffs on solar panels imported from China, but analysts say the impact may be marginal because the tariffs were expected and contain a loophole.
The International Trade Commission, an independent federal agency, voted unanimously that China’s subsidies for its solar manufacturers had harmed the U.S. solar industry.
Its decision allows the final tariffs approved last month by the U.S. Commerce Department to take effect.
The U.S. government had begun earlier this year to collect those tariffs, ranging from 24% to 36% on solar panels imported from five dozen Chinese manufacturers and up to 250% for other Chinese suppliers, but it was holding them as deposits until the final ITC ruling.
“This makes final what had already been happening,” says Shayle Kann of GTM Research, a unit of GreenTech Media, arguing there won’t be any immediate impact.
Longer term, he says the impact might be blunted because the tariffs apply only to panels made up of Chinese-produced solar cells, allowing Chinese companies to avoid them by assembling panels with cells made elsewhere.
The year-long trade dispute began in October 2011 when a coalition of manufacturers led by SolarWorld, a German company with factories in the United States, filed a petition with the Commerce Department and the ITC. They alleged Chinese manufacturers were illegally dumping solar cells and panels in the U.S. market and receiving billions in illegal subsidies from their own government.
After investigating the case, both Commerce and the ITC issued a preliminary ruling that agreed China’s subsidies were illegal or threatening U.S. manufacturers.
The case, however, split the U.S. solar industry. Many solar companies, primarily those that design, market and install solar panels, argued that the tariffs could raise panel prices, inflame trade tensions and stunt the industry’s rapid growth.
“The U.S. pioneered this industry,” but China tried to take it over with unfair subsidies, said Ben Santarris of SolarWorld. He welcomed the ITC’s final ruling but said it was difficult to predict its impact.
“The market already knew the tariffs were being collected,” Santarris said.
Lyndon Rive, co-founder of SolarCity, which installs solar panels and opposed the tariffs, said in an interview earlier this year that he was confident his company would be able to work around them and still continue to expand.