Tower Tariffs: The Winds of a Trade War with China?

Renewable energy trade conflicts with China are heating up and blowing strong. The latest action by the Commerce Department has set tariffs that could go as high as high as 73 percent on imports of utility-scale wind towers from China and as much as 60 percent on towers from Vietnam, adding further restrictions on clean-energy imports from Asia.

The agency’s International Trade Administration issued a “preliminary determination of anti-dumping duties” on July 27; the duties are expected to be finalized in December.

In the 4-page fact sheet announcing the decision, ITA says producers in the two nations, which exported $301 million in wind towers to the U.S. in 2011, sold the utility-scale towers below production costs. The agency acted on a complaint by the Wind Tower Trade Coalition, a group of U.S. manufacturers that includes Broadwind Towers Inc., DMI Industries, Katana Summit LLC and Trinity Structural Towers Inc.

Among culprits named in the finding were, in China, Chengxi Shipyard Co., Ltd. and Titan Wind Energy (Suzhou) Co., Ltd. and in Vietnam, CS Wind Corporation and CS Wind Vietnam Co. Ltd.

It’s just about the towers, however; excluded from the scope of the ITA finding are nacelles and rotor blades whether or not they are attached to the tower.

“China has ramped up the wind-tower production and done it in a way that is not reflective of market forces,” said Scott Paul, the executive director for the Washington-based Alliance for American Manufacturing, quoted by Bloomberg. “I’m hopeful these tariffs will give the American wind-energy manufacturers the breathing space to compete for more market space in the U.S.”

The U.S. has imposed duties on numerous types of renewable energy products from China in recent months, including solar panels (see TP of January 12). This has escalated trade tensions between the two nations.

The Commerce Department on May 30 set duties as high as 26 percent on wind-tower imports from China to compensate for Chinese government subsidies, again siding with U.S. manufacturers.

On May 17 the department set anti-dumping tariffs of 31 percent to 250 percent on imports of Chinese solar-energy products, after a complaint by manufacturers including the U.S. unit of SolarWorld AG. The agency in March announced duties of as much as 4.73 percent to offset subsidies received from China’s government, and last month determined that the country’s producers benefited from additional state support. A final ruling on those duties is scheduled for October.

Not to be outdone, in a complaint on May 24 to the Geneva-based World Trade Organization, China’s Ministry of Commerce said renewable-energy programs in California, Massachusetts, New Jersey, Ohio and Washington State violate global trade policies. China also says it filed a complaint at the WTO alleging that U.S. anti-subsidy duties undercut $7.3 billion in Chinese products, including solar panels.

A trade war in the renewable energy sector is unfortunate but it also illustrates just how important renewables are becoming on the world trade stage.

[Image: IMG_7529 by Kaj17 via Flickr CC]