Sunday October 20, 2019

U.S. IMPOSES DUTIES ON CHINESE CLEAN-ENERGY EXPORTS

May 31, 2012

 

On Wednesday, May 30, the United States Commerce Department imposed preliminary duties on wind turbine towers imported from China. The announcement followed a decision two weeks earlier to place tariffs of 31 percent on Chinese-manufactured solar panels exported to the United States. The duties on Chinese wind turbine towers, ranging from 13.74 to 26 percent, are still preliminary and will not take effect until October, contingent on an investigation and final decision by the U.S. International Trade Commission.

The announced duties on Chinese clean energy products are a response to accusations of market dumping on the part of Chinese manufacturers, whose lower costs enable them to sell their products in the U.S. at prices lower than the market rate, thereby hurting American manufacturers of the same products. The U.S. Commerce Department’s May 30 decision was in response to a complaint by the Wind Tower Trade Coalition, comprised of four major U.S.-based wind tower producers, accusing China of providing unfair government subsidies to companies exporting wind towers. The coalition of American manufacturers cited preferential tax treatment, grants, and cheaper prices for raw material inputs as examples of unfair support from the Chinese government enabling Chinese wind tower producers to gain a competitive edge in the U.S. market.

According to the U.S. Commerce Department, the United States imported $222 million worth of wind turbine towers from China and Vietnam in 2011, which amounted to double the market share these countries held in 2010. The aim of the new duties on Chinese wind turbine towers is to offset Chinese government subsidies that push American manufacturers out of the market. U.S. wind tower producers suffered a particularly large loss after all of the orders for the 388-tower Shepherds Flat Wind Farm project in Oregon, set to be the largest wind farm in the world upon completion next year, were given to Chinese firms.

However, not all agree with the U.S. Commerce Department decision. Christopher Hauer, U.S. director of tower operations for the electronics and electrical engineering company Siemens, spoke out against the U.S. imposing duties on Chinese wind towers in January, stating that in some cases importing wind towers from Asia may be cheaper and more reliable than buying and transporting products from U.S. suppliers. The China Chamber of Commerce for the Export of Machinery and Electronic Products also criticized the U.S. Commerce Department decision, arguing that the move was an example of protectionism that would harm the development and competitiveness of the U.S. wind power industry. The preliminary duties on Chinese wind turbine towers and those on solar panels are likely to have a significant impact on the Chinese clean energy industry as well; according to the economic analysis firm IHS, the proposed duties on Chinese solar panels could lead to a suspension of up to 45 percent of Chinese solar panel shipments to the United States this year.

Under its 12th Five Year Plan, China has ratcheted up investment in the U.S. clean energy sector. According to the Woodrow Wilson Center’s China Environment Forum, Chinese investment in renewable energy in the United States has grown at an annual rate of 130 percent over the last two years, and totaled $264 million in 2011. These investments, while helping to promote sales of Chinese-manufactured clean energy technologies including wind turbine towers and solar panels, also have the potential to create American jobs downstream in the installation and maintenance of clean energy infrastructure. As such, Chinese investment in the U.S. clean energy market may represent a win-win situation for the United States and China in promoting clean energy and reaching positive economic and environmental outcomes.

At the same time, the new duties on Chinese wind turbine towers and solar panels have the potential to increase trade frictions between China and the United States. At the WTO last week, China filed a broad complaint against U.S. anti-dumping duties on 22 Chinese products. China has also accused the United States of violating free-trade rules through government subsidies in the clean energy sector, including the American Renewable Energy Production Tax Credit Extension Act, which is set to expire at the end of this year. Presidents Hu Jintao and Barack Obama have launched a number of initiatives to expand collaboration in the field of clean energy, including the launch of the U.S.-China Clean Energy Research Center (CERC) and the U.S.-China Energy Cooperation Program (ECP) in 2009. However, the escalation in trade disputes between China and the United States in the past year, particularly in the area of renewable energy technologies, threatens to hinder bilateral cooperation in this and other areas.

 

For more information on U.S.-China clean energy trade disputes, please see the following news sources:

China Daily – “U.S. Slaps taxes on wind towers from China

New York Times – “U.S. Imposes Duties on Chinese Wind Tower Makers

Reuters – “Chinese wind towers hit with U.S. tariffs

Washington Post – “China asks WTO to block U.S. tariffs

Woodrow Wilson Center – “Chinese Investment in Clean Energy

 

For Chinese-language commentary on U.S. duties on Chinese clean energy exports, please see the following news sources:

Caixin (财新网) – “美国拟对从中国进口的应用级风塔征收反补贴税

Caixin (财新网) – “中美贸易摩擦又一季

 

 

Compiled and edited by Amanda Watson.