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New Tax on Solar Imports into the U.S.

The U.S. Department of Commerce announced that it added import duties to Chinese manufacturers’ solar panels and related items. 

The new duties add more than eighteen to thirty-five percent plus to these solar imports. The newly assessed duties will of course raise the prices of imports manufactured by Trina Solar Inc., Jinko Solar Holding Co., Ltd., and Yingli Green Energy. The shares of these companies immediately traded down on the announcement by an average five plus percent. Solar World Industries America, a U.S. subsidiary of German-headquartered Solar World, petitioned for the closure of a loophole that helps Chinese solar businesses to duck import duties. The U.S. Department of Justice first evaluated the issues in 2012.

 

U.S. solar companies’ shares also traded higher on the news. First Solar, in partnership with conglomerate General Electric, and Sun Power, partnering with Google, are already strong performers in the stock market. Solar installations in the United States were almost USD 14 billion in 2013, but about half of solar products installed were actually made in China. Rooftop solar is an extraordinary example of China’s dominance in the sector, controlling about seventy percent of the equipment installed.

The response to the Department of Commerce’s decision was negatively received by China’s government. In what was viewed as a retaliatory gesture, China’s imposed anti-subsidies of U.S.-imports of about fifty-three to fifty-seven percent on polysilicon. Regardless of the new U.S. duties, solar equipment and manufactured products are still controlled by Chinese businesses. And since China holds almost ten percent of outstanding U.S. national debt, it’s clear that the country has bargaining power with the United States.