SolarWorld (SWV.DE) and 24 other European solar manufacturers are keeping their word from months ago –
This week the EU ProSun Group filed a formal trade complaint with the European Commission asking it to investigate whether Chinese solar manufacturers dumped products at below-market rates in Europe.
It’s exactly the same petition filed in the US that resulted in the Department of Commerce imposing duties on imports of Chinese-made solar panels into the US.
Despite their own losses, Chinese solar companies continue to sell their products below cost in Europe, EU ProSun Group says. As in the US, European solar companies, which previously dominated the industry, are facing losses, if not bankruptcy because of Chinese competition.
"Chinese companies have captured over 80 percent of the EU market for solar products from virtually zero only a few years ago," says Milan Nitzschke, a SolarWorld vice president and executive director of EU ProSun Group. "EU manufacturers have the world’s best solar technologies but are beaten in their home market due to illegal dumping of Chinese solar products below their cost of production."
Even as solar panel prices keep falling, Chinese solar companies can still ramp production because they have cheap credit lines from state-owned China Development Bank.
"While the case is harder to win in Europe because of EU rules related to World Trade Organization regulations, the implications of possible EU dumping tariffs are ‘much more serious’ than the US case because of ‘substantially’ higher volumes sold in Europe, analysts at Jefferies Group say, reports Bloomberg.
Regulators will decide whether to investigate within 45 days of receiving the complaint.
Since the US imposed duties, Chinese companies are getting around them by buying slightly more expensive components in nearby countries, such as Taiwan, making solar manufacturers there the biggest beneficiaries. They also plan to move assembly to those countries to avoid the tariff.
Prices for solar panels in the US have still fallen by 20% this year.
Wind Tower Tariff
The US wind tower industry also filed a complaint against Chinese companies, which was approved for a tariff by the Department of Commerce at the end of May.
Commerce’s investigation concludes that Chinese firms receive production subsidies that range from 14-26%, warranting tariffs of the same amounts.
The tariff applies to utility-scale steel towers that support wind turbines that produce more than 100 kilowatts of electricity.
"As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection to collect a cash deposit based on these preliminary rates," says Commerce in a preliminary determination. A final decision will be made in August.
The US imported about $222 million of wind towers from China last year, according to Commerce.
China Fights Back
Last week, China launched its own salvo. It’s launching an investigation to decide whether it should impose duties on polysilicon imports from the US and South Korea.
The Ministry of Commerce will investigate whether US and Korean companies sold polysilicon at artificially low prices in China.
In addition, China will also examine US state subsidies for the sector, including tax exemptions, supplying land free of charge and granting public funds for job training.
The probe is expected to take about a year.
Last year, the price of US polysilicon imports into China dropped over 67% and many Chinese firms went out of business.
China also filed a World Trade Organization complaint challenging US import duties on 22 Chinese products including steel and solar panels.
Although this trade war focuses on the solar industry, the US and China are in similar disputes on a range of products, from tires to American cars and rare earths minerals.
The solar trade war has divided the US solar industry:
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