Dive Brief:
- A supplemental report prepared by the U.S. International Trade Commission at the behest of the U.S. Office of the Trade Repesentative concludes China "took advantage" of the United States government's commitment to renewable energy when it raised production of solar photovoltaic cells being sold abroad.
- Ambassador Robert Lighthizer, head of the USTR, requested in November that the ITC prepare the supplemental report to help President Donald Trump determine whether to impose duties on imported solar equipment. The report focused on any "unforeseen developments" that led to the case.
- The President must make a final decision on remedies by Jan. 26. In September, the ITC unanimously found cause for injury in a petition brought by Suniva and SolarWorld under the rarely-used global safeguard measure, Section 201 of the Trade Act of 1974.
Dive Insight:
President Trump has just three weeks to make a decision on the solar trade case, and it is not clear how the supplemental report will sway those deliberations.
The 10-page followup concludes: "The government of China’s industrial policies, plans, and support programs took advantage of the existence of programs implemented by the U.S. government to encourage renewable energy consumption that, consistent with U.S. WTO obligations, did not favor U.S. manufacturers but instead were directed at owners of renewable energy systems."
Chinese industrial policies ultimately led to vast overcapacity in China, the report found, and "subsequently in other countries as Chinese producers built facilities elsewhere, which in turn ultimately resulted in the increased imports of [crystalline silicon photovoltaic] products causing serious injury to the domestic industry in the United States."
The report also says negotiators from the United States "could not have foreseen" that the use of authorized tools, such as anti-dumping and countervailing duty measures on imports from China "would have limited effectiveness and instead lead to rapid changes in the global supply chains and manufacturing processes."
Suniva and SolarWorld petitioned the ITC for relief earlier this year under a rarely-used global safeguard measure; each has filed for bankruptcy. The two companies have requested a declining tariff that begins at $0.25/watt for crystalline silicon photovoltaic solar cells. For modules, they want tariffs that start at $0.32/watt and fall to $0.29/watt in four years. Suniva also requested a floor price of $0.74/watt for modules, and SolarWorld is pushing for quotas. The companies say without severe duties, they will be unable to continue business operations.
After the injury ruling, the ITC proposed three separate remedies, which Trump is now considering. The remedies were a mixture of tariffs, quotas and a new licensing fee proposed by SEIA. The highest tariff came in at 35%, or a little more than $0.15/watt.
Trump, however, has the option to ignore the ITC's recommendations and compose his own set of tariffs, or choose to take no action.
