U.S. solar group offers peace plan to avert China trade war

Source：Bloomberg Release Date：2013-09-25 204

Plastics & Rubber

Tensions between the U.S. and China, the world’s two largest economies, over clean-energy production have threatened to erupt into a trade war within the last year

By Brian Wingfield

A solar-energy group is offering a plan to resolve a trade dispute between the U.S. and China, saying import duties currently in place are crippling the industry in both nations.

The Washington-based Solar Energy Industries Association today announced a proposal to eliminate tariffs on solar gear and establish a fund to help U.S. manufacturers with contributions from China.

“The problem we have right now is that the trading rules are not working well,” John Smirnow, vice president for trade and competitiveness for the group, known as SEIA, said in a phone interview. “Solar has a very complex global supply chain” and relying on the existing system to settle trade disputes isn’t working, he said.

Tensions between the U.S. and China, the world’s two largest economies, over clean-energy production have threatened to erupt into a trade war within the last year, with both sides imposing duties on imports. The price of polysilicon, the main ingredient in solar cells, has dropped 57 percent since 2010, as both nations grapple for market share.

A spokesman from China’s embassy in Washington didn’t immediately respond to e-mail and phone requests for comment on the U.S. industry proposal.

The U.S. Commerce Department a year ago set penalty rates for Chinese producers, including Suntech Power Holdings Co. and Trina Solar Ltd. (TSL), after determining the companies had benefited from government subsidies and had “dumped” their products onto the U.S. market at below the cost of production. The American unit of Bonn-based SolarWorld AG (SWV) brought the complaint.

China Duties

In July, China began imposing duties as high as 57 percent on U.S. polysilicon imports.

The U.S. solar-energy industry, which includes manufacturers as well as installers of solar panels, has been caught in the crosshairs. While import duties on Chinese-made solar cells have benefited some U.S. manufacturers, they have made the finished panels more expensive, harming panel installers and consumers who face higher prices for the finished product, according to Smirnow.

At the same time, Chinese manufacturers face higher prices as they seek to avoid U.S. duties, he said. Since the tariffs set by the Commerce department last year apply only to Chinese-Air Jordan Six Rings