In a tit for tat with the US for imposing import tariffs on Chinese solar panels, starting this week, China will impose tariffs of 50 percent or more on polysilicon from the US and South Korea, reports the New York Times. This decision from China’s Ministry of Commerce will ratchet up the trade war that has been percolating for quite some time over anti-dumping.
The US imposed tariffs of 24 percent to 36 percent on Chinese made solar panels last fall and this June, the European Union imposed a comparatively modest 11.8 percent tariff that could go up to 48 percent if China does not stop ‘dumping’ – both the US and the EU have been trying to negotiate settlements with China for anti-dumping, complaining that Chinese manufacturers have taken advantage of unfair government subsidies to dump below cost goods.
The NYT reports that US trade officials will continue to negotiate with China on the solar panels and polysilicon despite this retaliatory step from China. China leads the world in solar panel production and exports about $30 billion worth to the West and imports polysilicon from the US, the EU and Korea. However, in its plans to impose stiff tariffs on the polysilicon, it has singled out US exports for the highest tariffs and will slap lower tariffs on Korean imports – but there was no mention of tariffs on imports from the EU.
If the US were to dispute the tariffs with the World Trade Organization, it may be able to eliminate them or alter them, but that could take a couple years, which could badly impact the domestic polysilicon industry in the meantime, according to trade attorneys that spoke to the NYT. Stiff tariffs of 50 percent or more could cripple US exports and the US industry would lose its primary market, say some experts. However, others point out that US exports to China have already been declining from a peak of $1 billion to $700 million, as China began developing its own production of polysilicon.
Testers, developers, financiers and insurers say that solar panels are facing a quality control crisis, just as the technology is on the cusp of widespread adoption, according to another NYT story in May. However, the scope of the problem is unclear. There are no official figures detailing how big a problem defective panels are to the $77 billion solar industry. Furthermore, when defects are discovered, confidentiality agreements often keep the manufacturer’s identity a secret, the paper reports.