China challenges US' tariffs on solar cells

It said the US has damaged its trade interests, but some watchers are sceptical.

Reuters reports that China has lodged a complaint to the World Trade Organisation (WTO) over the US' decision to subsidize renewable energy firms and impose tariffs on imported products like photovoltaics. The tariffs will be imposed for four years starting at 30% in the first year reduced to 15% in the fourth.

“As the US violations have severely distorted the global market for products like photovoltaics and seriously damaged China’s trade interests, China’s use of the WTO dispute settlement mechanism is a necessary measure to safeguard its legitimate rights and interests and maintain multilateral trade rules,” the commerce ministry statement said.

The move is not expected to have an immediate impact on China’s major solar manufacturers, including GCL, Jinko Solar, and Canadian Solar, as their exposure to US markets was reduced after earlier trade disputes.

The US has accused China of using subsidies and bulk manufacturing capacity to drive down prices and put US competitors out of business in a range of sectors.

According to figures from the China Photovoltaic Industry Association (CPIA), US solar module production capacity fell from 1.5GW in 2011 to 1GW last year as a result of bankruptcies.

China claims its manufacturers have benefited not from direct subsidy but from a fiercely competitive environment that has driven down costs.

Despite the policy shift, manufacturers have continued to ramp up production, with silicon wafer output up 39% in the first half.

From January to May, exports of solar products also surged 21% YoY. Only a fraction went to the US, with India the biggest market.

Read the full report here.