The World Trade Organisation (WTO) has ruled the U.S. violated international trade agreements in 2012 by imposing anti-dumping tariffs and countervailing measures against imports of Chinese-made solar materials.
The ruling was a response to an appeal from the Chinese Ministry of Commerce that alleged the increased tariffs not only affected solar panels, but a total of 22 other products; amounting to an annual export value of $7.2 billion.
The U.S. Department of Commerce (DOC) announced in 2012 it would raise import tariffs on Chinese solar cells and panels by up to 35.2 per cent in order to protect domestic solar manufacturing which, the Department claimed, was unfairly disadvantaged by state-owned Chinese companies flooding the American market with cheap solar panels and equipment.
The WTO Investigatory Panel found the U.S. DOC acted inconsistently with obligations set forth in the Agreement on Subsidies and Countervailing Measures when it initiated punitive tariff hikes against China as DOC officials failed to sufficiently prove that Chinese state-owned and partially state-owned solar businesses were “public bodies”.
The ruling is subject to an appeals process with a 120-day time limit, but for now the U.S. is definitely on the back foot. In an immediate response to the decision, China’s Ministry of Commerce pushed for a recalibration of trade rules between the two nations.
“China urge(s) the U.S. side to respect the WTO’s ruling, stop the abuse of trade remedy measures as soon as possible and ensure the environment of fair competition for Chinese businesses.”
The US national solar trade group, Solar Energy Industries Association (SEIA), responded more cautiously:
“We are continuing to follow developments closely, but today’s WTO decision is not expected to impact either the 2012 U.S. solar countervailing duty (CVD) order against China or any new CVD tied to the ongoing investigation until 2016, at the earliest. It’s also important to remember that this decision is subject to an appeals process, which could take approximately 120 days.”
Coalition for Affordable Solar Energy (CASE) president, Jigar Shah was critical of the DOC and its entire handling of the issue.
“CASE agrees with the WTO that some important parts of the protectionist 2012 U.S. solar tariffs are inconsistent with our trade commitments to others. Even more importantly, they hurt American solar workers and slow the deployment of clean energy,” he said.
“Yet the American solar industry once again faces uncertainty and unnecessary price hikes due to a new round of legal actions at the Department of Commerce. June’s countervailing duty determination is increasing module prices by 14%, and the Department of Commerce may attempt to further hike rates and expand solar tariffs with a preliminary anti-dumping determination next week.”
The so-called US/China solar trade war has been described previously as a great moment of stupidity.
