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US May Turn Up Heat On Chinese Solar Firms

2 July 2012 in Trading Ideas

Initial tariffs by the US on Chinese solar products were met with mixed reactions, and this same uncertainty is surrounding a potential move to hike some of these duties even more.

According to a release from the Coalition for American Solar Manufacturing, the US Commerce Department has discovered additional subsidies within China that are benefiting that nation’s producers of solar cells and modules.

CASM said this could mean the US would invoke an increase in rates that Chinese companies will have to pay when shipping their products to the US. The Commerce Department investigators allegedly found numerous illegal grant programs, the trade group said.

Proponents and opponents are preparing for the Commerce Department’s final determination on tariffs, which is scheduled for Oct. 9.

“Import duties imposed under US and world trade laws are not calculated to punish importers for illegal trade practices,” said Gordon Brinser, president of SolarWorld Industries America Inc., the largest US manufacturer for more than 35 years and the leader of CASM. “Instead, they are meant as a remedy to offset the unfair advantage that those illegal practices provide.”

China’s self-proclaimed leading solar-panel producer, Suntech, has denied breaking trade rules, which initially led to proposed tariffs, and several American companies have noted the duties would affect their business in a negative way.

“We are confident in our position and well-prepared to substantiate our strict adherence to fair international trade practices,” the company’s San Francisco office said.

Will Chinese solar companies be able to sustain business if the US ups the ante on tariffs and duties?