The Chinese Ministry of Commerce announced on Thursday its plan to impose steep tariffs on solar building materials imported from the US and South Korea. The decision, according to Diane Cardwell at The New York Times, will likely intensify an ongoing trade dispute with the West in which China was accused of dumping solar panels in the US by granting illegal government subsidies to its domestic companies:
The decision, which goes into effect next week, is a blow to the American industry, which analysts say counts China as its largest customer for solar-grade polysilicon, the main ingredient in solar panels.
The Obama administration and the European Union have been trying to negotiate settlements with China in the world’s largest antidumping and anti-subsidy trade cases.
[...] United States trade officials declined to say how China’s move might affect those negotiations but expressed disappointment. A spokeswoman for Michael Froman, the United States trade representative, said they were in discussions with China related to global issues in solar technology, including panels and polysilicon, and this step did not move the ball forward, “but we will continue to engage.”
China dominates the world market in solar panel production, exporting about $30 billion a year in panel shipments to the West, but it imports a majority of polysilicon from the United States, Europe and Korea. Its decision to tax United States companies heavily but levy lower rates on some Korean producers and leave Europe out is being widely seen as retaliation for the American trade case, originally brought in 2011. [Source]
China’s Suntech Power Holdings, one of the world’s largest makers of solar panels, was declared bankrupt in March.