WASHINGTON The United States imposed preliminary duties as high as 26 percent on a second clean-energy product from China on Wednesday, this time hitting the tall steel towers used to harvest power from the wind.
The decision by the U.S. Commerce Department is a victory for the Wind Tower Trade Coalition, a group of U.S. producers who say they are being driven out of business by low-priced imports from China and Vietnam.
The Commerce Department, in a move likely to further strain trade ties, said Chinese manufacturers received "countervailable" government subsidies ranging from 13.74 percent to 26 percent of the cost of the towers.
The U.S. tariffs are intended to offset Chinese government subsidies with Titan Wind Energy (002531.SZ) and related companies hit with a 26 percent preliminary duty. CS Wind China Co and related companies were given a 13.74 percent duty and all others 19.87 percent.
"This is an important step in remedying the harm caused by unfairly traded wind-tower exports," Alan Price, chair of Wiley Rein's International Trade Practice and lead attorney for U.S. producers, said in a statement.
Importers will have to post bonds or cash deposits based on the preliminary countervailing duty rates while the Commerce Department continues its investigation.
A final decision on duty rates is expected in August followed by a U.S. International Trade Commission vote in September on whether to allow the duties or not.
The U.S. group includes Trinity Structural Towers (TRN.N), Broadwind Towers (BWEN.O), DMI Industries (DMID.KA) and Katana Summit, a joint venture between Katana Industries, Sumitomo Corporation of America SUMTME.UL and SC Steel Investment.
U.S. producers also are asking for anti-dumping duties on wind towers from both China and Vietnam to offset what they say is unfairly low pricing. A Commerce Department decision in that phase of the case is due in late July.
Two weeks ago China accused the United States of "deliberating provoking trade friction in the clean-energy sector" by setting preliminary duties of 31 percent to 250 percent on billions of dollars of Chinese-made solar panels and cells.
Beijing also issued a broad complaint last week at the World Trade Organization against how the United States calculates anti-dumping and countervailing duties on Chinese goods.
SHUT OUT OF SHEPHERDS FLAT
In a separate case on Wednesday, the U.S. International Trade Commission, gave final approval to duties ranging from about 21 percent to 46 percent on high-pressure steel cylinders from China in a petition for import protection filed last year by a Texas manufacturer. The United States imported about $82 million of the cylinders from China last year.
The United States imported an estimated $222 million worth of wind towers from China in 2011.
The elegant structures, which can stretch more than 300 feet into the air, are assembled on site and hold the huge blades that turn the turbines. They represent about 15 percent of the cost of the multimillion-dollar final product.
U.S. producers are particularly upset about being shut out of the 338-tower Shepherds Flat project in eastern Oregon, which is due to be completed next year and is billed as the world's largest wind farm.
Chinese firms are supplying the towers instead, U.S. producers said at a hearing earlier this year.
Siemens (SIEGn.DE), the German electronics and electrical engineering giant, came out against imposing duties at an U.S. International Trade Commission hearing in January.
Company officials said demand for wind towers was driven by more than price and that for projects near the coast it can be cheaper to import from Asia than to buy from U.S. suppliers and ship the tower parts by rail.
(Reporting by Doug Palmer; Editing by Anthony Boadle and Bill Trott)