Solar War Reignites With Big US Tariffs 美国拟对中国太阳能电池高征税

By newsdoug on May 18, 2012

Solar trade war heats up with latest tariff decision Just when it looked like a trade war had been averted in the important solar energy sector earlier this year, the US Commerce Department has surprised everyone by recommending high punitive tariffs for China’s solar panel makers, casting a huge new cloud over this important industry. Chinese solar shares all tanked on the news, with industry leaders Suntech (NYSE: STP), Trina (NYSE: TSL) and Yingli (NYSE: YGE) all tumbling by 5 percent or more after the news came out, re-approaching all-time lows reached late last year at the height of the sector’s current downturn due a global supply glut. I have no doubt that this isn’t the end of this story, and we’re likely to soon hear an angry response from Beijing, which has taken some steps in recent months to try and show it is weaning its solar cell makers from the kinds of government-sponsored subsidies that were the source of the US complaint against a group that now supplies more than half of the world’s solar cells. In the latest development in this case, the US Commerce Department has announced that all China-produced solar cells will be subject to punitive tariffs ranging from 31 to 250 percent. (English article) That figure was sharply higher than an earlier indicator, which saw the Obama administration recommend relatively light tariffs of up to 4.7 percent after the Commerce Department first ruled earlier this year that Chinese panel makers did indeed receive unfair subsidies in the form of measures like low-interest loans from state-owned banks and export rebates. (previous post) Based on statements from Suntech and Trina it appears that these newest tariffs are both still preliminary and not final, and that most companies will be subject to the lower end of the range, or about 31 percent. But clearly this story is still not finished. It’s hard to say what is going on behind the scenes, as the earlier low tariffs and this latest round of much higher recommendations send clearly different signals. I suspect the earlier lower numbers were designed to send a signal to Beijing that a trade war could be averted if China took steps to reduce its government support for the sector. If that’s the case, then perhaps this latest round of recommendations is designed to show Beijing that it needs to move more quickly in weaning its solar companies from state support or risk seeing its companies subjected to these higher tariffs that could seriously hurt development of the global industry. Without access to more information it’s difficult to guess intelligently what’s really happening here. But having followed this conflict for nearly a year now since it first broke out, I still predict it will eventually be settled in a way that makes everyone somewhat happy, but also forces both sides to make sacrifices. In China’s case, the country needs to move more quickly with new high-profile steps to show it is ending its unfair subsidies. If it does that, I could still see the US imposing the previously discussed lower tariffs when it announces its final decision.

Bottom line: The latest twist in the US trade war with China over support for its solar panel makers may be a pressure tactic to make Beijing move more quickly to end unfair subsidies.

Enjoy this blog? Please spread the word :)