U.S. Announces Tariffs on Chinese Solar Panels

A New York Times article reported that the U.S. Commerce Department announced on March 20 a decision to impose tariffs on solar panels from China, having concluded that the Chinese government provided export subsidies to manufacturers. U.S. firms that depend on the imports of inexpensive Chinese solar panels were relieved that the tariff rates of 2.9 to 4.73 percent were lower than expected, while American competitors to the Chinese firms were not satisfied. However, the Commerce Department is due to decide in May whether these subsidized Chinese imports can be considered dumping. Should the act of dumping be confirmed, tariff rates will be further increased.

China’s rapidly growing green energy industry is clearly demonstrated by the enormous increase in U.S. imports of Chinese solar panels: from $21.3 million in 2005 to $2.65 billion in 2011. Such a fast rate of growth was made possible in part by government subsidies, which stem from the Chinese government’s concern for greater energy and economic security

The authors noted that some experts have suggested looking at the “trade strategies worked out between the United States and Japan in the 1980s to manage Japan’s rapid rise as an exporter.” However, the plan’s feasibility is unclear because U.S. leverage over Japan at the time was probably greater than U.S. leverage over China today. A trade official offered a different viewpoint – Beijing and Washington need to resolve the situation in a “mutually and globally beneficial way,” instead of taking unilateral action.

Posted By: Pokyee Yu

Sources: The New York Times

Photo Credit: solar panels courtesy of flickr user spanginator

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