China cheats in trade across the board, but the Department of Commerce just ordered 31% anti-dumping duties against China’s solar panel makers to neutralize predatory pricing.
The DOC International Trade Administration Fact Sheet is here. The products covered by the investigation included “crystalline silicon photovoltaic cells, and modules, laminates, and panels, consisting of crystalline silicon photovoltaic cells, whether or not partially or fully assembled into other products, including, but not limited to, modules, laminates, panels and building integrated materials.”
The decision is a big deal. Keith Bradsher, who covers China economy issues for the NY Times, writes:
The anti-dumping decision is one of the largest in American history, covering one of the largest and fastest-growing categories of imports from China, the world’s largest exporter. The department said the United States bought $3.1 billion worth of Chinese solar cells last year, giving China more than half the American market for the devices.
Countervailing duties, in a relatively small amount, were previously awarded in this same case. This anti-dumping duty decision was scheduled to occur later. Bradsher writes:
The solar tariffs, which are retroactive to 90 days before the decision, are in addition to anti-subsidy tariffs of 2.9 percent to 4.73 percent that the department imposed in March. The combined anti-dumping and anti-subsidy tariffs are likely to mean a substantial increase in the price of solar panels here.
I appreciate Bradsher’s terminology of “anti-subsidy tariffs” for countervailing duties. I have been on a mini-campaign correcting reporters who falsely characterize the duty awards as “punitive tariffs.” Punitive Tariffs is not correct, because they are not awarded to punish, but rather to offset cheating by other countries (through subsidies or dumping).
Solar World and other solar companies in the U.S. filed the case. Their lawyer summarized the cheating.
Alan Price, a partner who heads the international trade practice at Wiley Rein, the law firm representing the U.S. companies in both the solar and wind cases, said that China poses a particular threat to America’s developing green energy sector.
“China’s method is straightforward: it sets forth industry-specific Five-Year Plans and then uses all forms of national and local subsidies and other governmental support to quickly transfer jobs, supply chains, intellectual property, and wealth, to the permanent detriment of U.S. and global manufacturers,” he said. “China’s ability to ramp up and overwhelm an industry is unique and particularly devastating with new and emerging technologies, where global competitors may be less established and can be knocked out more easily and quickly.”
Those who say that China is moving to a market economy are simply wrong. China has increased its control of the economy in the last decade. Any predictions that they will change are speculative and wishful thinking. We need to be reality based.