On Monday, July 14, a World Trade Organization (WTO) panel upheld a complaint from China that the United States had violated trade rules when it imposed punitive anti-subsidy duties on solar equipment in 2012.
The WTO panel issued a report in the case “United States – Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India,” detailing the dispute settlement.
The U.S. levied tariffs on Chinese solar module exports in 2012 and added new preliminary tariffs for getting over the loophole related to the use of non-Chinese cells. Such measures were against the WTO pact signed in 1994.
The WTO panel agreed that U.S. should curb some of the duties, but at the same time it denied the Chinese accusation that the United States has raised the import cost very-high for importing the China-made solar panel in the country. The U.S. officials argued that the structure of the counter-tariff is to prevent the Chinese solar companies from getting the undue advantage through subsidies offered by the local government.
According to an article released by PV Tech, the U.S. imposed heavy duties after an investigation concluded that state support offered to Chinese PV suppliers had allowed them to undercut American competitors.
The article goes on to say that the WTO agreed that in certain countervailing or anti-subsidy duties imposed on Chinese companies, the U.S. had wrongly presumed that state-owned or partially state-owned enterprises (SOE) were necessarily “public bodies.” This assumption was used by the US as part of its justification for the duties, as it maintained that certain SOEs bodies were passing on subsidies from the Chinese government. But the WTO deemed this to be “inconsistent” with its own rules.
After the ruling was announced, Rhone Resch, president and CEO of the Solar Energy Industries Association (SEIA), issued the following statement:
“We are continuing to follow developments closely, but today’s WTO decision is not expected to impact either the 2012 U.S. solar countervailing duty (CVD) order against China or any new CVD tied to the ongoing investigation until 2016, at the earliest. It’s also important to remember that this decision is subject to an appeals process, which could take approximately 120 days. Assuming the decision is upheld on appeal, the United States would then have approximately one year to implement the decision. But even then, it’s not clear whether the decision will result in any substantive modification of a solar CVD order against China.”
According to an article released by ValueWalk, SolarCity shares surged 2%, yesterday, and the solar panel installer might be able to pay a lower price for Chinese products.
The financial news resource says Elon Musk’s SolarCity’s installation business could benefit most after the verdict of the WTO as it relies substantially on Chinese solar imports. Last-month, SolarCity acquired the panel maker Silevo saying, “the massive volume of affordable, high-efficiency panels needed for unsubsidized solar power to out-compete fossil-fuel grid power.”
Tony Clifford, Standard Solar CEO, has often commented on the China trade tariff situation and its impact on the solar industry. Most recently, he discussed the issue in his remarks as keynote speaker at this year’s PV America. Here is what he has to say on the matter:
“Like the overwhelming majority of the U.S. solar industry, I certainly welcome yesterday’s decision by the WTO. This decision affirms what we all believed in 2012 – the U.S. Department of Commerce trade decisions against the Chinese module manufacturers are essentially protectionist in nature. Right now the U.S. solar industry is striving to achieve cost competitiveness with grid-supplied electricity – and we’ve got until the end of 2016 to achieve it before the 30% ITC expires. We all know about the dramatic PV system price decreases in the past few years, but the cumulative effect of the 2012 and 2014 Commerce Department decisions is to reverse that cost reduction trend.”
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