Tuesday, May 22nd, 2012...6:05 pm
So You Knew the Anti-Dumping Tariffs on Chinese Solar Cells
You are thinking a preliminary 31.22% tariff for Suntech, 31.14% for Trina, 31.18% for 59 others companies, and finally 249.49% for all other Chinese companies — that’s crazy! (Or wonderful, depending on which side you are on.) What now?
First: Don’t panic!
Obviously this would crank up the PV prices and hurt the US developers. Yet Commerce is scheduled to issue the final determination in early October and the rates may change significantly. The rates would also be subject to annual reviews and changes.
Furthermore, this would depend on the US International Trade Commission (ITC) making an injury finding to the US industries. It is possible that the ITC will reach a no injury determination or a no critical circumstances determination in the final injury investigation. It should be noted that the ITC reaches no critical circumstances determinations in approximately 80% of the cases, so the 90 day retroactive liability people are so scared of may not be imposed.
In addition, the final rates may be appealed to CIT (the Court of International Trade), which will trigger Commerce to conduct a “sunset” review of the duties within five years of their imposition and see if they can be ended without injuring the relevant US industry.
Finally, Chinese companies can avoid the duties on future imports by moving their manufacturing of the cells to Taiwan and other countries (regions).
Three things that I’m watching out for:
1. Scope of this tariff in the final determination
The preliminary scope of the antidumping and countervailing tariff covers modules, laminates, and panels produced in third countries from Chinese-produced PV cells, but excludes modules, laminates, and panels produced in China using PV cells produced in third countries. The original scope of the case, however, did not cover third-country modules using Chinese origin cells.
2. Domestic content requirement
This case came at a time when two US senators, Chuck Schumer (D-NY) and Sherrod Brown (D-Ohio), are pushing for a bill to impose domestic content requirements on solar projects that want to qualify for a 30% investment tax credit. If the modules are not manufactured in the US, then their domestic content would have to be 70%. If they are manufactured in the US, the domestic content must be 50%. It’s unclear as of now how the domestic content would be measured, but this would have a huge impact on the renewable industry.
3. AD/CVD case against wind
In January, Commerce initiated antidumping duty investigations of utility-scale wind towers manufactured in China and in Vietnam and countervailing duty investigations against China. The preliminary determination on the countervailing duties is expected at the end of May while the preliminary determination on the anti-dumping duties is scheduled for early June.