United States solar manufacturers have announced the preparation of a trade complaint against China to be filed with the U.S. Department of Commerce and the U.S. International Trade Commission.
The complaint revolves around subsidies which support low-cost solar products imported from China. The U.S. International Trade Commission is an independent, “quasijudicial” Federal agency which analyzes, catalogs and protects American manufacturers against unfair foreign tariffs and trade practices.
The solar companies, including the U.S. division of Germany-based SolarWorld AG (XETRA.SWV.DE), say that the inexpensive solar panels produced in China are the result of enormous trade subsidies.
In fact, according to the U.S. Department of Energy’s (DOE) Jonathan Silver, China gave its solar industry participants $30 billion in credit, or 20 times as much as the U.S. gave its solar companies. Silver is the executive directors of the DOE’s loan program.
It is this kind of subsidization that makes it impossible for U.S. solar companies to compete against China. For example, in the first seven months of 2011, China shipped $1.4 billion worth of solar panels to the U.S. This is $200 million more than it sent during the whole of 2010, according to U.S. International Trade Commission data.
At issue are countervailing duties, which Oregon Senator Ron Wyden, a Democrat, has asked be assessed against Chinese solar imports coming into this country. Countervailing duties essentially level the cost/price playing field between foreign and domestic manufactured goods.
The impetus behind the filing was the collapse of Solyndra LLC, which failed in spite of $535 million in loan guarantees. The greater fear is that Chinese solar subsidies will decimate the entire U.S. solar industry by making it noncompetitive in the global marketplace.
And the solar industry is a microcosm of a larger situation which has the U.S., for example, imposing highly restrictive tariffs against Chinese tires to prevent them creating a glut in the U.S. marketplace.
In the renewable energy arena, it is this imbalance of trade – exacerbated by the recent Chinese trade restriction on rare earth minerals, which analysts interpreted as steering even more manufacturing into China, where it remains affordable and largely unregulated.
The U.S., the European Union (EU), and Mexico fought China on this issue and won a judgment from the World Trade Organization (WTO) in July. China has since appealed that ruling, and is waiting for a final WTO decision.