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U.S. loses 2010 PV trade surplus to China

Two reports released this week have documented the decline in U.S. solar exports over the past year, adding traction to calls for import tariffs on Chinese PV imports.

Senator Rob Wyden (D-OR), chairman of the Senate Finance Committee’s Subcommittee on International Trade, Customs and Global Competitiveness, released a report documenting the U.S. loss of market share in the PV industry, primarily to China.

The report, entitled “Losing the Environmental Goods Economy to China,” looks at U.S. exports of goods and services pertaining to environmental sustainability, like wind and solar power technologies.

The key finding was that U.S., EU and Japanese exporters of environmental goods – including PV products – have been losing market share to China in most major world markets. Further, the U.S. went from a worldwide solar trade surplus of $2 billion to an almost $1.6 billion deficit in 2011.

“The report’s findings correct the contention that the U.S. continues to enjoy a trade surplus with China in solar products,” Wyden writes in the report.

Solar cells on a production line at a Trina Solar factory. Photo Credit: Trina Solar

“Overall, it supports the assertion that China’s environmental goods industries are experiencing rapid growth that industries located in other countries appear unable to duplicate, suggesting that China’s competitiveness is significantly due to its violation of norms and rules of international trade.”

Senator Wyden is a key proponent of imposing import tariffs on Chinese-made PV products. This report builds upon his contention in an October, 2011 policy brief that China’s solar manufacturers have managed to control significant world market share by charging below-market prices.

“If China is breaking trade rules to give its industries an unfair advantage, it’s important that trade rules be enforced and tariffs be applied to negate that unfair advantage,” said Senator Wyden.

Industry Group Backing

The Coalition for American Solar Manufacturing (CASM), led by PV firm SolarWorld, filed complaints of illegal Chinese government subsidies to PV firms back in October, 2011. The claims are under investigation by the Department of Commerce and the U.S. International Trade Commission (ITC).

This past week, the Coalition released a report supporting the one released by Senator Wyden’s office. The report uses data from the Department of Commerce and the ITC, as well as a prior study by GTM Research.

CASM found that the U.S. became a net solar importer in 2011, moving from a solar trade surplus with China of at least $250 million in 2010 to a deficit of $1.6 billion in 2011.

“Chinese importers often claim that the modest U.S. trade surplus in 2010 proved that China is not threatening the U.S. solar industry and economy. But it is no longer 2010, and any trade surplus is history,” said Gordon Brinser, president of SolarWorld Industries America Inc.

“Illegal dumping by massively subsidized Chinese solar producers, combined with curbed exports of polysilicon and manufacturing equipment, are decimating U.S. solar manufacturers, the supply chain and their export business.”

The Coalition argues that this unfair competition has led to at least 12 U.S. producers undertaking layoffs, going bankrupt or closing plants over the past two years.

“Evidence continues to mount that China is resolved to dominate the global solar energy market and destroy America’s solar manufacturing industry and jobs. Enough is enough. China’s illegal trade must stop,” Brinser said.

Meanwhile, the Department of Commerce once again extended its decision on whether to place tariffs on Chinese PV products entering the U.S. The Department was poised to issue a determination yesterday, but now will make an announcement on March 20.

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