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 The U.S. International Trade Commission is scheduled to make a
preliminary decision at 11 a.m. EST (1600 GMT) on whether there is
good reason to think that the imports threaten or injure the
domestic solar industry.
A finding that they do would put Washington on a path toward
widening the reach of the steep duties it slapped on products from
China in 2012, potentially escalating a tit-for-tat trade spat. In
contrast, a negative finding could stop the complaint from the U.S.
arm of German solar manufacturer SolarWorld AG <SWVKk.DE> in its
tracks.
SolarWorld, which makes crystalline silicon solar panels at its
factory in Hillsboro, Oregon, has complained that Chinese
manufacturers are sidestepping the duties by shifting production of
the cells used to make their panels to Taiwan and continuing to
flood the U.S. market with cheap products.
Shayle Kann, senior vice president at solar market research firm GTM
Research, said a decision to broaden the duties would have a greater
impact than the 2012 decision as manufacturers have no handy escape
route.
"Either the manufacturers will have to set up manufacturing
elsewhere or they will have to pay the tariff. Either way, the
impact will be a lot more than it was the last time around," he
said.
"If the Commerce Department imposes tariffs that are significant
with the scope SolarWorld has proposed, then prices for solar panels
will be noticeably higher than they otherwise would have been."
The Coalition for Affordable Solar Energy, representing about 50
U.S. solar companies which mainly focus on installation, said the
cost of modules had already gone up 10 percent since December 31,
when the complaint was filed, as Chinese manufacturers prepared for
likely heftier duties.
"If they (the ITC) go against us, that could be an immediate 20
percent increase in solar module prices. We might lose tens of
thousands of jobs," said coalition President Jigar Shah.
He said only a fraction of the solar industry's 145,000 workers were
employed by manufacturers, who would stand to benefit from higher
duties on imports, while installers would suffer.
SolarWorld Chairman Frank Asbeck wrote in a letter to President
Barack Obama on February 5 that Chinese subsidies and below-cost
pricing had driven "dozens" of U.S. manufacturers out of business.
"Illegal trade practices threaten to destroy any ongoing U.S. role
in global solar industry competition," he wrote.
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The value of imports of solar products from China fell by almost a
third from 2012 to 2013 and imports from Taiwan rose more than 40
percent, although from a much smaller base, according to ITC data.
Commerce Department figures show solar imports from China were worth
just over $2 billion in 2012, while imports from Taiwan totaled $510
million.
China, which has criticized the United States over the new
investigation, has slapped anti-dumping and anti-subsidy duties on
imports of U.S. polysilicon, solar's key raw material.
U.S. solar installations were worth more than $13 billion in
2013, according to research firm GTM. About half the solar equipment
installed in the United States last year was made in China. In the
fast-growing rooftop solar market, that figure was 71 percent.
If the ITC decides the imports could be hurting the domestic
industry, the Commerce Department will make preliminary
determinations about whether the products are being sold in the
United States below their fair value or if their manufacturers
receive inappropriate levels of subsidies, and suggest duties.
Follow-up decisions from both the ITC and the Commerce Department
are needed before duties are finalized.
The trade group Solar Energy Industries Association has been trying
to get SolarWorld, Chinese manufacturers and the Chinese and U.S.
governments to settle the dispute.
Under the association's settlement proposal, Chinese companies would
agree to pay into a fund that would then be used for the benefit of
U.S. solar manufacturers. The deal would require China to revoke the
restrictions on imports of U.S. polysilicon.
(Writing by Krista Hughes; editing by
Jonathan Oatis)
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