The department said it found similar dumping on the part of Vietnamese
manufacturers and set duties at 52.67 percent for CS Wind, a major
supplier to the American market, and 59.91 percent for all other
Vietnamese companies.
The finding is the fourth this year in favor of American wind and solar
manufacturers and is likely to intensify tension with the Chinese, who
have been rapidly expanding manufacturing capacity for alternative
energy technologies and flooding global markets with inexpensive
products, especially solar panels.
Earlier this year, the Commerce Department ruled that China was dumping
solar panels on the American market and imposed duties of 31 percent on
most of the imports, which added to earlier duties imposed over what the
department said were unfair subsidies for its manufacturers.
On Thursday, a group of about 20 European solar manufacturers announced
that they had filed an antidumping case against the Chinese with the
European Commission.
The Chinese government has responded to the trade complaints by
beginning its own investigation into whether American and Korean
manufacturers of polysilicon, the main ingredient in the solar panels,
were selling the material below cost. Dumping occurs when a company
sells a product in another country at less than fair value.
In the wind tower case, the decision is preliminary, but the Commerce
Department will direct customs agents to begin collecting cash deposits
equivalent to the tariffs, which are in addition to duties of 13.7 to 26
percent that the department imposed in May for what it said were unfair
subsidies of the industry by the Chinese government. The department set
the tariffs for the companies that account for the bulk of Chinese
exports at 20.85 to 30.93 percent. Any others would be required to pay
the highest rate.
“Commerce has taken an important step to address the significant dumping
that is taking place,” said Alan H. Price, a lawyer at Wiley Rein,
which is representing the American wind manufacturers that brought the
complaint. The duties “will help to remedy the material injury already
suffered by the U.S. industry and force the Chinese and Vietnamese
producers to compete fairly,” he said.
The Chinese embassy in Washington did not respond to an e-mail seeking comment on the decision.
How the tariffs will affect the market is unclear. Like solar, the wind
industry has been under pressure to bring down the cost of producing
power to better compete with conventional fuels, a task made more
difficult by the low price of natural gas and the expiration of an
important subsidy at the end of this year. Wind industry executives say
that the looming end of the support, a production tax credit, has
already led to a decrease in demand for equipment and layoffs.
“On one hand, you say this is good for American manufacturing to have
tariffs if they’re truly dumping towers below their cost into the U.S.,”
said Michael Garland, chief executive of Pattern Energy, a wind
developer. “On the other hand, it’s not going to solve the bigger
problem we have, which is a dysfunctional Congress that can’t get
anything passed. Because there’s this cliff that everybody’s facing at
the end of the year, you’re not going to have any manufacturing in the
U.S. anyway.”
The towers, which can cost $600,000 each, often account for 20 percent
of the cost of a turbine. So although the tariffs might end up adding
only a small percentage to the overall cost of a project, they could cut
substantially into profits because that margin is only 7 to 10 percent,
Mr. Garland said.
On the solar side, there are also questions about the impact of the
duties. The major Chinese solar manufacturers have been able to keep
prices low and skirt the tariffs by purchasing cells, the component of
the panels to which the tariffs apply, elsewhere.
Imports of Chinese panels and cells decreased in May to $124 million
from $226 million the year before, according to the Coalition for
American Solar Manufacturing, an industry group that supports the trade
cases. But shipments from other countries like Malaysia, Taiwan and the
Philippines were up sharply. In the case of Malaysia, shipments were up
by 950 percent over the previous May, to $135.5 million, exceeding
China, according to the coalition.
Although the overall solar market continues to grow, executives and
analysts warned that uncertainty about the outcome of the trade cases,
which are only at the preliminary stage, could damp enthusiasm for
future projects because costs are unclear.
“I’m paying X rate today. Am I going to have to pay a duty on that six
months, a year down the road?” asked John Smirnow, a vice president of
the Solar Energy Industries Association, a trade group that is
advocating for negotiations between China and the United States to occur
simultaneously to the legal cases.
But those who brought the trade cases say it comes down to adhering to the law.
“We have to be doing legal activity when we’re doing business,” said
Steve Ostrenga, chief executive officer of Helios Solar Works, a panel
manufacturer based in Milwaukee. “It’s not trying to penalize them. It’s
just trying to make it right.”
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