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 Richmans' Trade and Taxes Blog

Commerce Department imposes tariffs on Chinese solar panels
Howard Richman, 5/20/2012

The solar industry is suffering from huge over-production glut worldwide due to the subsidies of the American solar panel industry by the U.S. government and the subsidies of the Chinese solar panel industry by the Chinese government. The Obama administration is desperately trying to protect its investment, before even more U.S. solar panel producers go bankrupt. Congressional Quarterly reported on May 17:

The Commerce Department on Thursday made a preliminary determination to impose tariffs of more than 31 percent on Chinese manufactured solar cells. The ruling came in response to U.S. solar manufacturers who claimed that China was "dumping" solar panels in the U.S.

The tariffs on two companies, Suntech Power and Trina Solar are lower than the 100 percent tariffs sought by SolarWorld USA and six other companies that filed a complaint with the U.S. government about low-priced Chinese imports. The new tariffs are in addition to tariffs of 2.9 percent and 4.73 percent that Commerce imposed on Chinese makers of photovoltaic cells and panels in March.

Commerce also announced a China-wide tariff of 250 percent for all other Chinese solar companies and granted critical circumstances, which means that the tariffs will be applied 90 days retroactively.

It may be too late to save Obama's investment in solar energy, the value of solar stocks is going through the floor with one company after another going bankrupt. The problem is that solar energy is only cost effective if given massive government subsidies, and the governments in Europe and North America are facing up to the reality that their funds are limited.

Comment by Dan, 5/21/2012:

A qouta would have been more desirable in this type of market.  Also an increase in quality (standards for efficiency and useful life) would have worked better.  Some of the standards may increse due to tarrifs but not the same way.

 This is a big fight that pits utilities, manufacturers and consumers. It looks like the utilities have won the first round with keeping standards low and distroying some of the builders' market.

Comment by Larry Walker Jr., 5/21/2012:

Higher Prices = Less Demand = Anti-Growth for All

Comment by Jack, 5/22/2012:

You know what's really sad? Look at the shameful way our natural gas resources have been raped by Chesapeake and their management. Secret deals, draining billions from the balance sheet and selling futures to mask the theft. One day that 47 billion TXU leveraged buyout by GS & KKR will blow up and those futures contracts will be worthless.

Every body will think China solar companies are doomed but it's the US manufactures that will go BK. along with the 100,000 employees across the industry.