United States: U.S. Department Of Commerce Finds 'Dumping' And Unlawful Subsidization Of Solar Product Imports

On December 16, 2014, the U.S. Department of Commerce announced its affirmative final determinations regarding imports of certain crystalline silicon photovoltaic products used for solar generation.¹ The Department determined that China and Taiwan violated antidumping duty law² by selling solar products in the U.S. at significantly less than fair value. Additionally, it determined that China violated countervailing duty law³ by providing subsidies to Chinese solar manufacturers.

The investigations were initiated nearly a year ago following a petition filed by SolarWorld Americas Inc.,⁴ the largest U.S. solar panel manufacturer with headquarters in Hillsboro, Oregon.⁵ This is SolarWorld's second such petition; its first concluded with duties imposed against China in 2012.⁶

The Department found dumping rates by Chinese producers ranged from 26.71 percent to 165.04 percent and dumping rates by Taiwanese producers ranged from 11.45 percent to 27.55 percent.⁷ Dumping percentages are generally calculated "to bridge the gap back to a fair market value."⁸

The Department found China provided solar product exporters/producers subsidies ranging from 27.64 percent to 49.79 percent.⁹ Countervailing duties "are calculated to duplicate the value of the subsidy."¹⁰ The Department reasoned: "[b]ecause the Government of China failed to respond completely to certain questions, [the Department] applied adverse facts available in determining that certain subsidy programs were countervailable."¹¹

The next step is a final injury determination by the U.S. International Trade Commission, which is expected on or about January 29, 2015.¹² That will determine whether U.S. Customs and Border Protection will permanently collect increased cash deposits based upon the dumping and subsidization percentages.

There are conflicting opinions on how these tariff increases will affect the U.S. energy industry. Tariff opponents claim that it will: (1) cause solar prices to rise; (2) stunt solar production and growth as an alternative energy option; and (3) hinder cooperation between the U.S. and China on climate change.¹³ Yet proponents say increases will help a struggling U.S. solar manufacturing industry compete.¹⁴ The long-term effects may become clearer once the final injury determination is issued next year. One thing unlikely to change is the ongoing conflict between U.S. solar manufacturers and solar generators and others who prefer to procure solar materials at the lowest cost, which is often from overseas.

Footnotes

1 See U.S. Department of Commerce, International Trade Administration, Fact Sheet: Commerce Finds Dumping of Imports of Certain Crystalline Silicon Photovoltaic Products from China and Taiwan and Countervailable Subsidization of Imports of Certain Crystalline Silicon Photovoltaic Products from China at 1 (Dec. 16, 2014) [hereinafter Fact Sheet], available at http://enforcement.trade.gov/download/factsheets/factsheet-multiple-certain-crystalline-silicon-photovoltaic-products-ad-cvd-final-121614.pdf.

2 See id. "For the purpose of [antidumping] investigations, dumping occurs when a foreign company sells a product in the United States at less than its fair value."

3 See id. "For the purpose of [countervailing duty] investigations, countervailable subsidies are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over impor ted goods."

4 See id. at 6, 2.

5 See SolarWorld, About Us, http://www.solarworld-usa.com/about-solarworld/overview (last visited Dec. 19, 2014).

6 Julia Pyper, New Tariffs on Chinese Solar-Panel Makers Split the US Solar Industry, Greentech Media (Dec. 17, 2014), http://www.greentechmedia.com/articles/read/commerce-department-hits-chinese-panel-makers-with-higher-tariffs.

7 Fact Sheet, supra note 1, at 5.

8 U.S. Department of Homeland Security, U.S. Customs and Border Protection, Anti-dumping (AD) and Countervailing duties (CVD) (updated Sept. 3, 2014), available at https://help.cbp.gov/app/answers/detail/a_id/216/~/anti-dumping-%28ad%29-and-countervailing-duties-%28cvd%29 [hereinafter Customs and Border Protection].

9 Fact Sheet, supra note 1, at 5.

10 Customs and Border Protection, supra note 7.

11 Fact Sheet, supra note 1,at 2.

12 See id. at 2, 4.

13 Herman K. Trabish, U.S. Imposes Tariffs on Chinese and Taiwanese Solar Panels, Utility Dive (Dec. 17, 2014), http://www.utilitydive.com/news/us-imposes-tariffs-on-chinese-and-taiwanese-solar-panels/345318/.

14 Pyper, supra note 6.

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