U.S. Commerce Department Announces Tariffs on Chinese Solar Panels

by Fiona Gabriel | Monday, May 21, 2012 | 386 views

Last Thursday the U.S. Commerce Department announced that it would impose tariffs on Chinese-made solar cells and panels imported into the United States. The tariffs are retroactive for 90 days.

The ruling is preliminary and the duties will be reviewed at the end of the year.

A group led by SolarWorld, a U.S. subsidiary of a German company, charged that Chinese solar cell and panel makers were “dumping” their products onto the U.S. market. In the context of international trade, the term dumping refers to a form of predatory pricing normally thought of as selling products below production costs. But in fact, merely selling products abroad at prices much lower than in the domestic market or less than fair value is considered to be dumping.

The group charged that Chinese solar panel makers are using unfair cost advantages, receiving billions in subsidies and on top of all that selling solar cells and panels here at below cost in order to drive U.S. solar cell and panel manufacturers out of business. This, they claimed, was in violation of World Trade Organization rules.

The Commerce Department agreed and slapped tariffs of 31% to 250% (the exact rate varying by manufacturer) on Chinese solar cells and panels imported into the U.S.

The decision was applauded by many who believe this move is important for the future of U.S. manufacturing, and will help America’s future as a competitor in the growing green energy sector. China has a history of driving local producers out of business and then raising prices.

Critics maintain that most solar-related jobs in the U.S. are not in manufacturing but in design, engineering, sales, installation and maintenance. Increasing costs to consumers will actually stunt the growth of the U.S. solar energy industry and in fact result in a net loss of U.S. jobs. This move will also likely inflame trade tensions with China.

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