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Will Tariffs On China Keep SolarWorld In Oregon?

Yesterday the U.S. Department of Commerce announced it would impose import taxes on Chinese solar panels. The decision was a response to complaints from U.S. solar panel manufacturers, but only a preliminary one.

The issue has divided the U.S. solar industry. Manufacturers asked for 100 percent tariffs to maintain fair pricing for solar panels in the U.S. market, while solar panel installers and retailers said any tariffs would hurt their industry by raising prices.

As The Oregonian reported, the tariffs announced yesterday were small: 4.73 percent on imports from Trina Solar, 2.9 percent on Suntech and 3.59 percent on all others. But there is an outstanding Commerce investigation into charges that China is “dumping” solar panels in the U.S. by heavily subsidizing their production and allowing companies to sell them at unfair prices.

So, we’re still waiting for a May 16 decision to address that complaint, which could lead to higher import taxes on Chinese panels. Meanwhile, The O reported on some broader lingering questions about whether tariffs will be able to keep manufacturers such as SolarWorld operating in the U.S. – particularly if Chinese companies move their operations to other countries:

“The open question is whether tariffs of any size will prove sufficient to save U.S. solar manufacturers. Fatima Toor, an industry analyst with Lux Research in Cambridge, Mass., doesn’t think so. Chinese manufacturers are already moving operations to other low-cost countries, she said. The only way U.S. manufacturers will compete is by wrangling government subsidies similar to China’s or moving overseas.

‘Not a lot is going to come out of this,’ Toor said. ‘SolarWorld will be at a cost-per-watt disadvantage if they continue manufacturing in Oregon.’”

But not everyone agrees with that position, The O reported:

Tim Brightbill, a lawyer for SolarWorld and other manufacturers, said the countervailing duties applied to all solar cells made in China. The Chinese can’t escape duties by shipping cells to third countries for assembly into modules. Moving cell manufacturing to other countries will involve hundreds of millions in new investment.

‘U.S. producers can compete with cells made in any other country,’ he said. ‘They just can’t compete with China and the Chinese government.’”

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