U.S. trade officials slapped modest tariffs on imports of Chinese solar panels, giving a partial victory to solar-equipment manufacturers in the U.S. but stopping short of harsh duties that could spark a trade war.
Responding to a complaint by the U.S. unit of Germany's SolarWorld AG SWV.XE -3.57% and six other firms who complained about competition from Chinese rivals, the Commerce Department announced preliminary duties of between 2.9% and 4.73% on Chinese solar cells and solar panels.
The ruling found that Chinese solar manufacturers enjoyed some unfair government financial assistance that helped them become an export powerhouse.
The U.S. imported more than $3 billion worth of Chinese solar cells and panels last year, double the amount of imports in 2010.
Tuesday's move may not be the final step. The Commerce Department is expected to rule by May 17 on a related complaint, that Chinese manufacturers are selling cells and panels at prices below fair value.
If the department finds dumping, it could put additional, antidumping tariffs on the Chinese firms.
Solar panels are just part of a wider battle over Chinese trade practices. The U.S., the European Union and Japan last week brought a case against China at the World Trade Organization for Beijing's restrictive policies regarding rare-earth metals.
Earlier this month, the White House created a trade-enforcement unit to investigate trade practices.For its part, China's Ministry of Commerce has accused the U.S. of protectionism for its solar-panel probe.
Chinese officials have said they would investigate U.S. trade subsidies for clean energy, and separately, Chinese firms have accused U.S. suppliers of polysilicon, a raw material for solar panels, of dumping and asked Beijing to investigate.
A call to the Chinese embassy in Washington wasn't returned.
The solar trade case has divided the U.S. solar-power industry. Some panel manufacturers, led by SolarWorld, blame China's subsidized solar industry and the alleged dumping for destroying as many as 2,000 U.S. solar manufacturing jobs. They say tariffs are needed to level the playing field.
"Every little bit helps," said Gordon Brinser, president of SolarWorld's U.S. unit, in an interview Tuesday. "Our whole intent here is to rebuild American renewable-energy manufacturing."
However, companies developing solar-power projects worry that tariffs on inexpensive Chinese imports—whose low price helped fuel last year's record level of solar-energy installations in the U.S.—will lead to higher-priced equipment and choke growth.
Jigar Shah, the president of the Coaltion for Affordable Solar Energy, a trade group opposed to the trade complaint, called the decision to impose low tariffs "a relatively positive outcome for the U.S. solar industry."
Suntech Power Holdings Co., STP +14.06% the world's biggest maker of solar panels
and one of the Chinese companies named in the Commerce Department ruling, said the small 2.9% antisubsidy tariff imposed on the company vindicated its position.
"This initial decision reflects the reality that Suntech's global success is based on free and fair competition," said Suntech's chief commercial officer, Andrew Beebe, in a statement.
Suntech's American depositary shares jumped 14% on the news, while shares of Trina Solar Ltd., TSL +7.28% another
Chinese company affected, rose 7.9%.
Suntech, Trina, Yingli Green Energy YGE +12.07% Holding Co. Ltd. YGE +12.07% and other large Chinese solar-panel makers have denied dumpingpanels in the U.S. and have also denied accusations they received unfair government subsidies.
Jesse Pichel, an analyst with Jefferies & Co., said that he had expected duties of between 8% and 12%.
He said that although the countervailing duties were "better than expected," Suntech and other Chinese solar firms could be subject to antidumping tariffs, which analysts expect could be between 10% and 100%.
SolarWorld and the other U.S. firms are hoping the department levies much larger antidumping tariffs in the next phase of its investigation. Antidumping tariffs are often "significantly higher" than duties imposed to counteract excessive government subsidies, said Timothy Brightbill, a SolarWorld attorney.
Commerce expects to make a final decision on today's countervailing duties in June. Before the duties can take effect, the International Trade Commission would have to find that U.S. producers are being harmed by the imports.
The independent government panel is expected to vote on the countervailing duties in July.
Suntech's Mr. Beebe said trade restrictions "large or small" would delay America's embrace of cleaner energy.
That point has been echoed recently by some economists who argue the shift toward alternative energy sources would benefit from mimicking the information-technology revolution, in which manufacturing was often outsourced to low-cost countries.
If the goal is to spur widespread adoption of new energy sources, "why should I care if it is produced in China, Germany, Spain, or the U.S.?" said Matthew Slaughter, a professor at Dartmouth College's Tuck School of Business. "You're going to be better off and wealthier if you specialize and don't try to do everything yourself."
SolarWorld's Mr. Brinser rejected that notion. "If manufacturing goes overseas, innovation will follow," he said.
wsj.com
Responding to a complaint by the U.S. unit of Germany's SolarWorld AG SWV.XE -3.57% and six other firms who complained about competition from Chinese rivals, the Commerce Department announced preliminary duties of between 2.9% and 4.73% on Chinese solar cells and solar panels.
The ruling found that Chinese solar manufacturers enjoyed some unfair government financial assistance that helped them become an export powerhouse.
The U.S. imported more than $3 billion worth of Chinese solar cells and panels last year, double the amount of imports in 2010.
Tuesday's move may not be the final step. The Commerce Department is expected to rule by May 17 on a related complaint, that Chinese manufacturers are selling cells and panels at prices below fair value.
If the department finds dumping, it could put additional, antidumping tariffs on the Chinese firms.
Solar panels are just part of a wider battle over Chinese trade practices. The U.S., the European Union and Japan last week brought a case against China at the World Trade Organization for Beijing's restrictive policies regarding rare-earth metals.
Earlier this month, the White House created a trade-enforcement unit to investigate trade practices.For its part, China's Ministry of Commerce has accused the U.S. of protectionism for its solar-panel probe.
Chinese officials have said they would investigate U.S. trade subsidies for clean energy, and separately, Chinese firms have accused U.S. suppliers of polysilicon, a raw material for solar panels, of dumping and asked Beijing to investigate.
A call to the Chinese embassy in Washington wasn't returned.
The solar trade case has divided the U.S. solar-power industry. Some panel manufacturers, led by SolarWorld, blame China's subsidized solar industry and the alleged dumping for destroying as many as 2,000 U.S. solar manufacturing jobs. They say tariffs are needed to level the playing field.
"Every little bit helps," said Gordon Brinser, president of SolarWorld's U.S. unit, in an interview Tuesday. "Our whole intent here is to rebuild American renewable-energy manufacturing."
However, companies developing solar-power projects worry that tariffs on inexpensive Chinese imports—whose low price helped fuel last year's record level of solar-energy installations in the U.S.—will lead to higher-priced equipment and choke growth.
Jigar Shah, the president of the Coaltion for Affordable Solar Energy, a trade group opposed to the trade complaint, called the decision to impose low tariffs "a relatively positive outcome for the U.S. solar industry."
Suntech Power Holdings Co., STP +14.06% the world's biggest maker of solar panels
and one of the Chinese companies named in the Commerce Department ruling, said the small 2.9% antisubsidy tariff imposed on the company vindicated its position.
"This initial decision reflects the reality that Suntech's global success is based on free and fair competition," said Suntech's chief commercial officer, Andrew Beebe, in a statement.
Suntech's American depositary shares jumped 14% on the news, while shares of Trina Solar Ltd., TSL +7.28% another
Chinese company affected, rose 7.9%.
Suntech, Trina, Yingli Green Energy YGE +12.07% Holding Co. Ltd. YGE +12.07% and other large Chinese solar-panel makers have denied dumpingpanels in the U.S. and have also denied accusations they received unfair government subsidies.
Jesse Pichel, an analyst with Jefferies & Co., said that he had expected duties of between 8% and 12%.
He said that although the countervailing duties were "better than expected," Suntech and other Chinese solar firms could be subject to antidumping tariffs, which analysts expect could be between 10% and 100%.
SolarWorld and the other U.S. firms are hoping the department levies much larger antidumping tariffs in the next phase of its investigation. Antidumping tariffs are often "significantly higher" than duties imposed to counteract excessive government subsidies, said Timothy Brightbill, a SolarWorld attorney.
Commerce expects to make a final decision on today's countervailing duties in June. Before the duties can take effect, the International Trade Commission would have to find that U.S. producers are being harmed by the imports.
The independent government panel is expected to vote on the countervailing duties in July.
Suntech's Mr. Beebe said trade restrictions "large or small" would delay America's embrace of cleaner energy.
That point has been echoed recently by some economists who argue the shift toward alternative energy sources would benefit from mimicking the information-technology revolution, in which manufacturing was often outsourced to low-cost countries.
If the goal is to spur widespread adoption of new energy sources, "why should I care if it is produced in China, Germany, Spain, or the U.S.?" said Matthew Slaughter, a professor at Dartmouth College's Tuck School of Business. "You're going to be better off and wealthier if you specialize and don't try to do everything yourself."
SolarWorld's Mr. Brinser rejected that notion. "If manufacturing goes overseas, innovation will follow," he said.
wsj.com
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