The International Trade Administration under the US Department of Commerce said that it has found that Chinese solar product exporters are receiving financial assistance from the Chinese government that benefits the production of goods.
The Department of Commerce announced on Tuesday its affirmative preliminary determination that imports of certain crystalline silicon photovoltaic products from China are receiving countervailable subsidies, and that countervailing duty law seeks to prevent "market distorting effects caused by injurious subsidization of imports into the US, establishing an opportunity to compete on a level playing field".
The trade administration had said earlier in February that it would investigate solar-energy products imported from the Chinese mainland and Taiwan because there was "reasonable indication" that the imports were hurting the US solar industry.
The US branch of German solar panel maker SolarWorld filed a complaint with the US Commerce Department in December, accusing China of flooding the US market with cheap products. The country changed production of solar panel parts to Taiwan to avoid various US trade duties, the company alleged. SolarWorld also said that Chinese solar firms like Canadian Solar, Suntech Power, and Yingli Solar are benefiting from government assistance, making it hard for US companies to compete.
Punitive duties would be imposed after both the Commerce Department and the US International Trade Commission (ITC) made affirmative final rulings, which are scheduled on Aug 18 and Oct 3, respectively. If the ITC makes a negative determination, the investigations will be terminated.
"What we think the worst case scenario is, assuming the existing tariffs on the Chinese modules with the Chinese cells don't change from the current roughly 40 percent level, the worst case outcome is that Chinese manufacturers go back to using Chinese cells and are able to sell modules into the US at prices that are competitive with western suppliers. So we don't see the US market being closed off from Chinese suppliers as a result of this proceeding, even if it does result in more tariffs," said Wade Shafer, senior solar analyst with consultancy group IHS.
SolarWorld said in the statement that the ruling has "great importance for the domestic solar manufacturing industry".
China's photovoltaic industry also issued a joint statement last month, opposing the United States' second anti-dumping and countervailing investigations on Chinese photovoltaic products. The statement called for the US and China to solve the disputes through negotiations.
China's Ministry of Commerce has reiterated its calls for the US to objectively and fairly handle ongoing solar trade disputes, honor its commitment against protectionism and work with China to maintain a free, open and just trade environment.
In 2013 imports of solar-energy products from China were valued at approximately $1.5 billion, according to the Trade Commission. Imports from the Chinese mainland fell to about 47 million units in 2012 from 93 million in 2011 while imports from Taiwan increased to 41 million in 2012 from 22 million in 2011, according to figures from the US Commerce Department.