A Measured Rebuttal to China Over Solar Panels

Source: NY Times


The US Commerce Department said on Tuesday that it would impose tariffs on solar panels imported from China after concluding that the Chinese government provided illegal export subsidies to manufacturers there.

The tariffs were smaller, at 2.9 to 4.73 percent, than some American industry executives had expected. At that size, their effect on the market could be limited. But additional tariffs could be imposed in May, when the Commerce Department is scheduled to decide whether China is “dumping” solar panels into the United States at prices below their actual cost. A finding of dumping would result in additional tariffs that could be far larger than these.

But whatever the size of the penalties, Tuesday’s ruling is likely to further heighten trade tensions with China, and to have implications for renewable energy policy in this country.

Although the ruling is the result of a quasi-judicial review process by civil servants in the Commerce Department, the imposition of tariffs by an arm of the Obama administration also seems certain to enter the partisan fray.

The president’s supporters might point to it as evidence that he continues to play tough with Beijing. But opponents, including the Republican presidential candidate Mitt Romney, who are already criticizing Mr. Obama for what they say is a low level of attention to China trade issues, might call the small penalties insufficient.

The Commerce Department declined to comment Tuesday.

Li Junfeng, a Chinese government renewable energy policy maker who is also the president of the Chinese Renewable Energy Industries Association, a government-backed trade group, welcomed the Commerce Department’s decision not to levy heavier tariffs. “I’m happy that it’s not a lot, but not surprised — the Chinese government does not give too many subsidies to the companies,” he said.

Whatever political spin proponents or critics might want to put on the tariff decision, there is no question that solar panels from China now control about half of the American market, while panels from the United States control less than a third.

American imports of Chinese solar panels have soared to $2.65 billion last year from $21.3 million in 2005.

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