US Department of Commerce releases countervailing determination of lower-than-expected subsidies

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The US Department of Commerce has released its preliminary determination on countervailing imports of silicon PV modules from China. The DoC states Chinese producers and exporters received a subsidy ranging between 2.9-4.73%. Many analysts had expected subsidies in the range of 20-30%. As the top two exporters/producers, Suntech and Trina Solar were singled out, with Suntech having received 2.9% and Trina 4.73%; all other Chinese companies received 3.61%.

In response, Suntech issued the following statement: “Unilateral trade barriers, large or small, will further delay our transition away from fossil fuels at a time when the majority of Americans demand cleaner and more secure energy such as solar,” said Andrew Beebe, Suntech’s chief commercial officer. “Regardless whether tariffs are imposed on solar cells from China, we can provide our customers in the US with hundreds of megawatts of high-quality and affordable solar products that are not subject to tariffs.”

Trina Solar issued a more subdued statement: “This determination is only the first step and is subject to further examination and final determination later this year. Until then, Trina and the solar industry will continue to operate in an era of uncertainty brought upon by these proceedings. Until the final determinations are made, it is premature to speculate about next steps in the United States, but know that Trina Solar is committed to serving the United States’ market for the long term.”

Initiated by SolarWorld last year, president Gordon Brinser had the following to say, “The US government has recognized that China’s subsidies destroy the solar market and jeopardize jobs. The provisional anti-subsidy customs duties imposed now are a first step towards re-establishing fair competition in the United States.”

The Coalition for Affordable Solar Energy – set up in opposition to the SolarWorld-led organization Coalition for American Solar Manufacturers – echoed Suntech’s sentiments: “Today’s preliminary determination is a relatively positive outcome for the US solar industry and its 100,000 employees. However, tariffs large or small will hurt American jobs and prolong our world’s reliance on fossil fuels. Fortunately, this decision will not significantly raise solar prices in the United States as SolarWorld sought,” said Jigar Shah, president of CASE.

“This decision clearly demonstrates that the Commerce Department did not find the Chinese government engaged in massive subsidization, as SolarWorld and CASM claim,” he continued. “There is more work to be done to protect the future of solar industry and power in America. A recent study by the Brattle Group confirmed that placing artificially high tariffs on solar panels would severely undermine the US solar industry, resulting in the loss of up to 60,000 US jobs by 2014.”

Yingli Green Energy passionately stands by its previous testimony to the International Trade Commission; Robert Petrina, managing director of Yingli Americas said, “We will continue to fight for affordable solar energy and further growth of the tens of thousands of US solar jobs that we help to create. Regardless of the outcome of this proceeding, we remain dedicated to the US solar market.”

Q-Cells’ North America CEO Boris Schubert stated, “To build 21st century energy infrastructure in a complex market like the United States, our industry needs to stay focussed on providing reliable, predictable and sustainable energy solutions for utilities and other customers.”

The view from China remains amicable, maintains Liu Baocheng, a professor at the University of International Business and Economics in Beijing. “I don’t think China will retaliate,” Baocheng said. “They won’t politicize this issue. They’ll probably play this down as a technical issue.”

The China Voice wrote a scathing article in response to the outcome of the preliminary hearing: “The U.S. should gradually learn to adapt to a marketplace in which emerging countries are playing more active roles by sharpening its own capabilities in innovation and lowering costs, and not resorting to protectionist moves to shun obligations.

“When conducting subsidy and dumping probes, the US government should make decisions based on facts. Punitive duties, big or small, will distort normal trade relations and risk disturbing the fragile global economic recovery process.

“Good trade will serve as a ballast stone, not a stumbling block, for the economic vessel to navigate choppy waters. In a time of crisis, the US government should keep that in mind.”

Trade group SEMI maintains a level head in a statement: “While SEMI is not a party to these specific cases, we continue to urge that they proceed on a factual basis and not become politicized. SEMI urges US and Chinese leaders to begin a dialogue that goes beyond the narrow confines of the current antidumping/countervailing duty cases and addresses the range of issues impacting solar PV. SEMI calls on trade negotiators around the world to work together on measures that would eliminate trade and investment barriers to solar energy.”

The DoC has instructed US Customs and Border Protection to collect cash deposits or bonds for products imported into the US in the last 90 days prior to this announcement.

Timeline

May 17     Department of Commerce’s preliminary determination for anti-dumping investigation
June         Department of Commerce’s final determination for countervailing
July 19     The International Trade Commission will announce its final determination

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