China Accused of 'Dumping' Solar Panels in U.S.

Seven solar firms filed an antidumping petition against China today. In the petition, the companies accuse China of illegally subsidizing Chinese firms to advance solar panel exports. From the Wall Street Journal:

The company said it and six other concerns filed the petition with the U.S. Department of Commerce and the International Trade Commission. The petition also alleged the Chinese government has been providing illegal subsidies to its solar-power manufacturing industry.

Gordon Brinser, president of SolarWorld’s U.S. unit, said the company, which has been making silicon-based solar panels for years, “can compete with anyone in the world.” However, “illegal subsidies in China” have prompted “the Chinese solar industry to come in and gut and own the U.S. solar industry,” Mr. Brinser said, speaking at a press conference here.

Sen. Ron Wyden (D., Ore.) said that while U.S. demand for solar power has been “skyrocketing,” the “American solar industry has been collapsing.” He added, “There seems to be one primary explanation for this: that China is cheating.”

The petition filed Wednesday alleges that Chinese solar-product manufacturers are receiving “massive illegal subsidies from the Chinese government…to advance the exports of Chinese manufacturers.”

Sen. Jeff Merkley (D., Ore.) said Chinese government-backed banks extended $25 billion in loans to large solar-product manufacturers last year, “at fixed, subsidized rates” and with “relaxed restrictions.”

The petition also mentions currency manipulation as another tactic that drives out American solar businesses. From the Washington Post:

The companies complain that China has aided its own solar companies with low-interest loans, cheap land deals and lax environmental standards that lower costs. In addition, they say that China’s currency, which is generally believed to be 10 to 35 percent undervalued, makes Chinese exports cheaper than they should be. Moreover, they allege that many of the Chinese companies are losing money on U.S. sales, a tactic to grab market share and drive U.S. competitors out of business.

Labor costs, which make up less than 10 percent of solar panel production costs, are not a key factor.

“We can compete with any country in the world,” said Santarris. “However it is very difficult for us to compete with the Communist Party of China.”

The Financial Times reports that the coalition’s main push is to put in effect a US tariff on Chinese solar panels.

Timothy Brightbill, a lawyer with Wiley Rein, the law firm representing SolarWorld, said the case would seek anti-dumping tariffs of more than 100 per cent on solar cells and panels from a wide variety of Chinese manufacturers. “China has a system of pervasive and illegal subsidy payments,” he said, including government cash grants and subsidised loans to the industry and subsidised raw material inputs. China had gone from an 8 per cent to 45 per cent share of the US solar market since 2008, Mr Brightbill said.

China has rejected allegations of unfair subsidy and the issue has divided the US solar panel and solar cell industry. Companies that use imported Chinese inputs are resistant to starting a trade war with Beijing. The Solar Energy Industries Association, a business organisation, released a balanced statement on the action on Wednesday, saying that companies had the right to ask for redress against subsidised imports but that free and open trade was important for the sector.