The U.S. Department of Commerce announced today the imposition of countervailing duties on imports of Chinese crystalline silicon photovoltaic (PV) cells and modules in a percentage ranging from 2.90 to 4.73 percent (depending on which company makes them) as a result of its preliminary determination in an investigation of subsidies to Chinese PV cell and module manufacturers. Specifically, Wuxi Suntech Power Co., Ltd., received a preliminary subsidy rate of 2.90 percent, Changzhou Trina Solar Energy Co., Ltd., received a rate of 4.73 percent, and all other Chinese producers/exporters received a rate of 3.61 percent.

Despite the relatively small size of these tariffs, this decision has broad implications for international trade, renewable energy, and U.S. manufacturing.

The countervailing duties are retroactive for 90 days before this ruling because Commerce previously found that a major increase in imports occurred ahead of the possible imposition of duties. As a result, U.S. Customs and Border Protection will collect a cash deposit or bond from importers of Chinese PV equipment based on these preliminary rates, applicable to all entries of Chinese solar cells made up to 90 days prior to this ruling. Deposit or bond posting obligations would continue until a final countervailing duties decision is issued.

After numerous postponements, this determination addresses countervailing duties needed to balance the below-market loans and raw materials, export assistance and other support programs that China offers its manufacturers of solar PV cells. Although tariffs were expected, this level appears to be lower than the expected level.

In today’s decision, Commerce also clarified the scope of the countervailing duty investigation as well as the related anti-dumping investigation. Commerce found that the scope covers not only imports of solar cells produced in China and solar modules and panels produced in China from Chinese-made solar cells, but also imports of solar modules and panels produced outside of China from solar cells produced in China. However, Commerce also found that the scope does not cover imports of modules and panels produced in China from solar cells produced in a third country.

With regard to anti-dumping, the investigation is ongoing into whether Chinese manufacturers have sold PV cells and modules in the U.S. at prices below the cost of production in order to win market share. The preliminary determination in the anti-dumping case, which also has been postponed, is now due on May 17, 2012.

Recently, the Obama administration has become increasingly vocal in criticizing Chinese trade practices, especially given the emphasis that the administration has placed on the U.S. manufacturing sector as a job creator. This proceeding has great importance for both manufacturers of PV solar panels as well as solar energy developers. It likewise has broad implications for the U.S. economy, international trade, and relations with China.

For more information, please contact any member of the Energy and Project Finance Group.


Copyright © 2012 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

 

 

 

Related Practice