* Preliminary decision found lower Chinese subsidies than
* U.S. will issue first ruling on anti-dumping duties in May
* Imports of solar cells, panels from China hit $2.8 bln in
By Doug Palmer and Matt Daily
WASHINGTON/NEW YORK, March 20 The United States
o n T uesday dealt a blow to U.S. manufacturers of solar panels
and boosted shares in their Chinese rivals when it imposed
preliminary punitive duties of less than 5 percent on imports
Nonetheless, the action adds to trade tensions between the
world's two largest economies and threatens cooperation in the
burgeoning clean-energy sector, which both countries say they
want to promote.
President Barack Obama, running for re-election in November,
has promised to crack down on unfair Chinese trade practices and
last week challenged China's export restrictions on critical
"rare earth" industrial materials in a case filed with the
European Union and Japan at the World Trade Organization.
Energy analysts had expected Chinese imports of solar panels
to be hit with preliminary duties of 20 percent to 30 percent,
but the rates announced on Tuesday ranged from just 2.90 percent
to 4.73 percent.
Tuesday's trade move is the latest salvo from Washington in
its efforts to help the nascent U.S. clean energy industry
compete against China's fast-growing companies, which are the
leading suppliers to the global solar market.
Rapid expansion by those Chinese companies has created a
glut of solar panels that drove prices down sharply last year,
pushing some weaker U.S. companies, including Solyndra, into
Shares in the leading Chinese solar companies erased early
losses to rally on the New York Stock Exchange on the news, with
Suntech Power Holdings closing 14 percent higher, Yingli
Green Energy gaining 12 percent and Trina Solar
climbing 8 percent.
The Coalition for American Solar Manufacturing, a U.S.
industry group that has complained that massive Chinese
subsidies were driving them out of business, tried to put the
best face on the news.
It said it believed the U.S. Commerce Department would
uncover more subsidies and unfair pricing practices as it
continues its probe in the coming months, which would result in
higher final duties.
"Today's announcement affirms what U.S. manufacturers have
long known: Chinese manufacturers have received unfair and
WTO-illegal subsidies," said Steve Ostrenga, chief executive
officer of Helios Solar Works in Milwaukee, Wisconsin.
Senator Ron Wyden, an Oregon Democrat who has been a driving
force behind the case, also said he expected duties to
"significantly swell" as the case proceeds.
An attorney representing SolarWorld Industries America and
other U.S. manufacturers said Commerce Department officials have
only just begun to investigate some of the group's subsidy
charges, providing hope duties would increase.
China accounts for 114 of the 283 anti-dumping and
countervailing duty orders the United States has on foreign
goods. The Obama administration has imposed more than 50
anti-dumping and countervailing duty orders since taking office
in January 2009, including about 40 against Chinese goods.
The United States imported $2.8 billion worth of solar cells
and panels from China in 2011, up sharply from about $1.2
billion just a year earlier, according to industry estimates.
The Commerce Department will announce preliminary
anti-dumping duties in May to address a separate set of charges
that Chinese producers are selling solar panels in the U.S.
market at unfairly low prices.
CHINESE COMPANIES FEEL 'VINDICATED'
Chinese producers and U.S. companies opposed to the duties
said the preliminary decision on Tuesday belied charges that
China was flooding its solar sector with subsidies.
"We're pleased and in large part feel vindicated," Robert
Petrina, managing director of Yingli Green Energy's U.S.
business said. "I think it is a positive outcome and I think it
really speaks to the crux of the argument."
Jigar Shah, president of a coalition of U.S. solar panel
sales and installation companies which were opposed to duties,
called the ruling an "initial victory for America's solar
industry and its 100,000 employees" because it would not
significantly raise prices for solar products and hurt demand.
Rob Stone, a solar analyst with financial services firm
Cowen & Co, said the duties, however small, push solar panel
prices in the wrong direction if the sector wants to become a
viable alternative to fossil fuels.
"In the end, solar needs prices to go down more from where
they are now, even though they've come down precipitously,"
Stone said. "This is why this whole thing is so stupid, because
it will not help the small, uncompetitive U.S.-based
SolarWorld Industries America, the U.S. arm of leading
German solar manufacturer SolarWorld AG, has led the
U.S. industry coalition seeking import relief.
The Commerce Department set a preliminary duty of 2.90
percent on SunTech Power Holdings, the world's biggest producer
of photovoltaic solar panels, and a preliminary duty of 4.73
percent on Trina Solar, another major Chinese producer, industry
officials said. All other Chinese solar panel producers and
exporters received a duty rate of 3.59 percent.
Importers will have to post bonds or cash deposits based on
the preliminary countervailing duty rates while the department
continues its investigation.
The "surprisingly low" numbers would likely mean that the
major Chinese companies would need to pay between about $5
million to $10 million to cover products shipped, said Timothy
Arcuri, an analyst with Citigroup.
While the dumping duty decision in May could impose a
greater penalty on the Chinese companies, "this by itself has
relatively minimal impact," Arcuri said.