The War over Solar Power – China vs. United States

1. The War over Solar Power – China vs. United States International Trade RelationsFall 2011 Ferima Sidibe Rebecca Tinger Stephanie Trumpower

2. Contents • Overview & Background • Existing & developing U.S. legislation • Plan of Action: Commerce & ITC • Anti-dumping & Subsidies • Major Problems • Case study: Solar panels – China v. U.S. • Policy suggestions/Implications

3. Overview • Is China illegally subsidizing its solar industry to weaken competition from the United States? • What policies can the U.S. implement to protect their green jobs industry? Source: The Washington Post

4. Legislations Involved • The two central legislations involved: • Anti-dumping • Subsidies

5. The Problem: China is dumping its solar panels into the United States at a price lower than the cost of making and distributing them. American solar panel companies are going bankrupt because they cannot compete with Chinese solar panel companies.

6. China’s Domination of Solar Power: Within 5 years China supplies over half of the American Market for solar panelsChina accounts for 3/5 of the world’s solar panel productionChina exports 95% of its production

7. China-U.S. Trade War http://www.youtube.com/watch?v=oH5RdJFX5Lc&feature=player_embedded

8. U.S. Competition “the U.S. industry can definitely compete and they have competed, they just can't compete against the government of China. They can compete against other companies anywhere around the world, it's just the government, it's these preferential loans and grants and subsidies and also the dumping at below cost levels that they cannot compete with and they're not required to compete with under WTO law.” -Timothy Brightbill,

9. The US Department of Commerce is considering new anti-dumping & countervailing duties on the import of Chinese solar panels.

10. Timeline—2011 • January—Congress approved provision allowing State Dept to buy only American-made panels • August—3 American solar power companies filed for bankruptcy (including the Obama-supported Solyndra) • October—dispute filed by SolarWorld Industries America • November 7—China Energy Conservation & Environment Protection Group held back on $500 million of solar components for US projects b/c trade complaint could make conducting business too expensive if tariffs are imposed • November 9—Commerce Dept opened an investigation into Chinese subsidies and dumping of solar cells into US • November 22—Beijing warned launch of own trade investigations against US • November 25—Chinese investigation launched • December 2—International Trade Commission vote scheduled

11. Potential Policy Consequences

12. Effects on US Solar Industry • Dispute has divided the US solar industry • CASM vs. CASE • Possible that tariffs will be imposed on Chinese goods to the detriment of US Solar industry, which relies on low prices to remain viable industry • Duty charged on solar equipment could have negative effect on US companies with operations in China

13. Coalition for American Solar Manufacturing (CASM) • Consortium of 7 U.S. domestic producers of crystalline silicon solar technology • All firms endured significant layoffs or went bankrupt in the last 2 years due to China’s dumping and subsidies practices • Central purpose: to hold China accountable to U.S. and international trade law by filing antidumping and countervailing duty trade remedy petitions • Led by SolarWorld • silicon crystal, cuts crystal into wafers, produces photovoltaic cells Source: CASE

14. Coalition for Affordable Solar Energy (CASE) • Coalition of American solar companies that believe free trade and industry competition • Comprised of manufacturers of solar panels, solar developers, system owners, retailers, installers, engineers, and companies involved in the innovation, engineering, and production of the ever-growing and improving solar industry. • Imposition of tariffs will result in a contraction of the U.S. solar industry.

15. Chinese Reaction • Could shift end phases of production to South Korea, Taiwan, US • Chinese industries requested parallel investigations • Examining US’ subsidies for polysilicon & its alleged dumping on world markets • Escalating dispute

16. Parallel Response from Other Nations • The US campaign has triggered trade petition drives to hold China accountable in Australia and Europe as well

17. Political Ramifications • Major issue: manufacturing policy, job creation, climate change • White House accused by trade group of turning the commercial complaint into “a political farce, which is very likely a publicity show initiated by the Obama administration in the coming elections”

18. Political Rhetoric Source: The Washington Post – 11/19/11

19. Policy Prescription • Move production stages 2-4 to the US • Invest in other viable energy options • Tax breaks

20. Sources • Bradsher, K. (2011, November 9). Trade War in Solar Takes Shape. Retrieved November 21, 2011, from New York Times: http://www.internationaltraderelations.com/Article.China%20and%20U.S.%20Trade%20War%20Over%20Solar%20(AD)%20(NYT%2011.11.11).pdf • CASE. (2011, November). About the Coalition for Affordable Solar Energy (CASE). Retrieved November 22, 2011, from CASE: http://coalition4affordablesolar.org/?page_id=2 • Coalition for American Solar Manufacturing. (2011, November 22). News Coverage. Retrieved November 22, 2011, from Coalition for American Solar Manufacturing: http://www.americansolarmanufacturing.org/news-coverage/index.htm • Malawer, S. S. (2011, November 22). China, Multinationals and Presidential Politics - Any Chance for Constructive Change? Not Anytime Soon. Retrieved November 27, 2011, from Global Trade Relations: http://globaltraderelations.wordpress.com/2011/11/22/china-multinationals-and-presidential-politics-any-chance-for-constructive-change-not-anytime-soon/ • Martina, M. (2011, November 25). Now China to probe U.S. renewable energy support. Retrieved November 27, 2011, from Reuters: http://www.reuters.com/article/2011/11/25/us-china-usa-energy-idUSTRE7AO05I20111125 • Mufson, S. (2011, October 19). U.S. solar manufacturers to file dumping charges against Chinese firms. The Wahington Post, p. 3. • PR Newswire. (n.d.). Coalition For Affordable Solar Energy: Spiraling Trade War Hurts Everyone, Everywhere. Washington, DC, USA. Retrieved November 27, 2011, from http://www.thestreet.com/story/11320902/1/coalition-for-affordable-solar-energy-spiraling-trade-war-hurts-everyone-everywhere.html • Restuccia, A. (2011, October 19). Solar manufacturer presses Obama administration to investigate China. Retrieved November 25, 2011, from The Hill's E2 Wire: http://thehill.com/blogs/e2-wire/e2-wire/188565-solar-manufacturer-presses-us-to-investigate-china • Trauzzi, M. (2011, October 25). SolarWorld trade lawyer discusses petition to tariff Chinese solar imports. (T. Brightbill, Interviewer) • World Trade Organization. (2011, October 24-25). Committee reviews reports on anti-dumping actions. Retrieved Novemner 21, 2011, from WTO: http://www.wto.org/english/news_e/news11_e/anti_01nov11_e.htm • WashingtonPost.”On the campaign trail, how to deal with China” http://www.washingtonpost.com/world/on-the-campaign-trail-how-to-deal-with-china/2011/10/19/gIQAcDgoyL_graphic.html 19 October 2011. Accessed 22 November 2011

21. Sources • http://eon.businesswire.com/news/eon/20111128005526/en/solar-panels/solar-energy/solar-power • http://www.ibtimes.com/articles/256450/20111126/china-solar-trade-dispute-panel-components.htm • http://www.marketwatch.com/story/us-china-trade-dispute-could-halt-demand-for-ja-solar-and-renesola-products-2011-11-18 • http://agmetalminer.com/2011/11/23/polysilicon-at-the-center-of-us-china-solar-panel-dumping-debate-part-two/ • http://www.prnewswire.com/news-releases/coalition-for-affordable-solar-energy-case-doubles-membership-in-first-week-134054593.html • http://theenergycollective.com/davidbelden/70871/trade-dispute-poses-dangers-residential-solar • http://topics.nytimes.com/top/news/business/energy-environment/solar-energy/index.html