China not pleased with US slapping import duty on solar panels

Says US is sending world negative signal about trade protectionism

By Ankur Paliwal
Published: Saturday 19 May 2012

China has reacted sharply to the 30 per cent import duty slapped by the United States on Chinese solar cells and panels entering its market. It is a new development in the long-drawn trade battle between the United States and China. 

In a statement released on May 18, Shen Danyang, spokesperson of China’s ministry of commerce said, “The US department of commerce lacks fairness, and China expresses its strong displeasure.” By deliberately provoking trade friction in the clean energy sector, the US is sending the world a negative signal about trade protectionism, he added.

The decision to impose 30 per cent import duty on the Chinese solar panels was announced by the US department of commerce on May 17. This was in response to an appeal filed by local firms to the department in October last year. The Coalition of American Solar Manufacturing (CASM) had complained that China is selling heavily subsidised solar cells and panels, below the market price, in the US. Following this, the department launched an enquiry. At that time also, China had warned US saying that the probe could damage energy cooperation between the two countries and impede the progress of global efforts to deal with climate change.

Reacting to the US ruling, some of the leading Chinese solar panel manufacturers have denied that they have sold their products at prices lower than the US market price. “All leading companies in the global solar industry want this trade war to end. We need competition and innovation, not litigation,” said Andrew Beebe, chief commercial officer of Suntech which exports solar panels in the US. Reportedly, Yingli Energy and Trina Solar, China-based solar companies, have said that they will actively defend their position in administrative proceedings.

However, the ruling is preliminary and the Chinese firms will have the chance to challenge the tariffs before they are made final by the end of this year.
China rules more than 60 per cent of the global solar market. According to CASM data, import of Chinese crystalline solar cells and panels in the US rose more than 300 per cent between 2008 and 2010. Till August 2011, Chinese imports in the US totalled $1.6 billion.

Renewable energy analysts say that the ruling will result in further retaliation from China and hurt both the countries. China imports a large amount of raw materials from the US to produce solar panels. Reportedly a recently released report of Deutsche bank also said that the anti-dumping duties increase the risk of retaliatory action by the Chinese government on the US polysilicon imports for making solar panels.

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