Neoliberals and conservatives will get to trot out their favorite phrase, “trade war.” And to be sure, there’s a jobs vs. environment question to be asked about this latest move by the Obama Administration. But the Commerce Department has moved ahead with slapping high tariffs on Chinese solar panels:
The United States on Thursday announced the imposition of antidumping tariffs of more than 31 percent on solar panels from China.
The antidumping decision is among the biggest in American history, covering one of the largest and fastest-growing categories of imports from China, the world’s largest exporter.
The department said the United States bought $3.1 billion worth of Chinese solar cells last year, giving China more than half the American market for the devices.
Many solar panel installers in the United States have opposed tariffs on Chinese panels, contending that inexpensive imports have helped spur many homeowners and businesses to put solar panels on their rooftops. The new tariffs are likely to mean a substantial increase in the price of solar panels here.
Basically you have a debate between US solar manufacturers and US solar installers. The installers say that their industry is finally getting competitive with fossil fuels, in part thanks to cheap solar panels from China. And they say that this will retard their growth. The manufacturers, of course, don’t want to be taken out of the solar market, undercut by Chinese imports. This is basically what happened to Solyndra.
From an environmental standpoint, if you want to see renewable energy grow, you may not care about the country of origin of your solar panels. China subsidizes their solar industry, and that means more solar panels available to the world. They do the same thing with wind turbines, which is the subject of a subsequent case in front of the Commerce Department. Do we want to increase the costs of these industries, making coal and natural gas more attractive?
Here’s Sherrod Brown’s argument. He supports the solar tariffs. This is from his press release:
Brown wrote to President Obama in December expressing his support for a petition filed by a coalition of U.S. solar manufacturers with the U.S. Department of Commerce and International Trade Commission seeking relief from illegal Chinese trade practices. The petitioners alleged that Chinese imports of crystalline silicon solar cells are being dumped into the U.S. market far below their fair value, and that Chinese solar cell and panel producers receive massive subsidies from the Chinese government. In October 2011, Brown introduced an amendment to increase trade enforcement to enable U.S. trade officials to increase trade enforcement initiatives to level the playing field for Ohio solar industry and other manufacturers forced to compete with unfair Chinese trade practices.
“The Commerce Department’s decision today shows that trade enforcement matters, and is an important step towards combating China’s multiple, massive, and illegal trade violations. It’s been proven that China isn’t competing in the clean-energy marketplace—it’s cheating, and its unfair solar trade practices have already resulted in the announced the loss of thousands of good-paying U.S. manufacturing jobs,” Brown said. “I applaud the Commerce Department for working to hold China accountable for its unfair solar subsidies and dumping practices. If we want to have a solar manufacturing industry, we need to utilize trade enforcement tools to combat the massive export subsidies other countries provide. This decision will help establish a fair and level playing field for American manufacturers, including the many solar manufacturers in Northwest Ohio.”
Brown also has pending legislation with Chuck Schumer that would help protect the domestic solar industry.
I would agree with Brown on a few points. It’s not like China only violates this one trade law, on solar panels. This is about the multiple trade violations in which they are engaged. And if you let the solar panels slide, you’re essentially picking winners and losers among industries based on what social or environmental policy you want to see. There are either trade laws or there aren’t.
I would like to see the spread between Chinese and US-made solar panels in the wake of this announcement. If demand for solar remains high – and it’s growing all the time – I’m not sure whether people will mind paying a bit extra in the near-term. The long-term advantages of solar work out the same financially: to the individual, there’s a savings from going off the grid or selling back power to the grid. The cost of the parts up front isn’t that much of a factor in the long run. And the way that power companies are charging for solar these days, with no up-front cost and factoring the price into your electricity bill over 25 years, I’m not sure anyone really sees this cost increase in the end. Plus, you allow stateside manufacturing companies to compete.
In addition, China may move their manufacturing to countries where the tariff isn’t a factor. And there is an overabundance of solar panels right now on the market, which means that this may not even raise prices in the near term.
The fines are preliminary, so expect a negotiation process before we get to a final number on the tariff. Brad Plumer has more.