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China Slaps Massive Tariff on U.S. Imported Solar Materials

Eric Justian headshotWords by Eric Justian
Energy & Environment

In the midst of an international trade dispute over solar components and threats of Chinese tariffs, Michigan-based Hemlock Semiconductors permanently laid off 400 workers in Michigan and Tennessee last March. The company makes polysilicon, the main material for producing photovoltaic solar cells. Sure, a huge percentage of solar panels have been coming from China. But U.S. companies manufactured a significant portion of the polysilicon that went into those panels. The polysilicon was made here, sent to China, assembled into solar panels, and sent back here. The supply chain, being what it is, still benefited U.S. companies and workers, and Chinese companies and workers I might add, as solar use grew. Everybody wins. Economics at its best.

But on Monday, those tariffs became a reality. China, arguably the U.S. and Europe's largest rival in renewable energy manufacturing, announced tariffs of up to 57 percent against polysilicon imports coming from the United States. Polysilicon imports from, for example, Hemlock Semiconductors in Hemlock, Michigan, produced by hundreds of men and women in Michigan and Tennessee.

These international trade disputes can seem somewhat academic until you can point to an actual family kicked to the curb because mom or dad lost a job. Or a whole community losing millions in economic activity. Then the cold, distant world of trade disputes hits way too close to home in a very real way.

The Coalition for American Solar Manufacturing protested China's move on Monday. The coalition keeps a tally of all the businesses and jobs it represents. As of today that number is 243 solar-technology installers, producers employing 22,362 American workers all over the country. The industry represents a significant amount of jobs and revenue for the communities they inhabit.

The CASM feels the tariffs are retaliatory, in response to a trade case SolarWorld (backed by CASM) filed against China's state-backed solar cell and panel industry in October 2011. In addition to the new tariffs, China has announced making illegal and export intensive subsidies available to its own solar industries.

China has a long and storied history of bucking World Trade Organization rules and obligations, resorting to subsidies, currency manipulation and retaliatory tariffs at the expense of U.S. companies and workers. The nation is currently facing claims from the European Union of "dumping" solar glass components, subsidized by China and sold at below market value. Those shenanigans are felt acutely in the growing renewable energy sector in the U.S., though China would certainly argue its measures are justified as the nation has filed its own disputes with the WTO against the European Union for renewable energy subsidies.

The U.S.'s own on-again-off-again support for the renewable energy industry, particularly the Production Tax Credit, have not been helpful either, giving Chinese companies an opportunity to swoop down and cash in on the abandoned spoils of half hearted U.S. efforts to encourage the industry.

Here in the U.S., we are watching the renewable energy market expand while U.S. renewable energy companies seem to be struggling to maintain a secure footing. These trade disputes and frail U.S. policies are costing American jobs, innovation, and businesses.

Eric Justian headshotEric Justian

Eric Justian is a professional writer living near the natural sugar sand beaches and singing sand dunes of Lake Michigan in Muskegon, Michigan. When he's not wrangling his kids or tapping at his computer, he likes to putter in his garden, catch king salmon from the Big Lake, or go pan fishing with his boys.

As a successful blogger his main focus has been energy, Great Lakes issues and local food.

Eric is a founding member of the West Michgian Jobs Group, a non-profit organization that evolved from a Facebook page called Yest to West Michigan Wind Power which now has over 8000 followers. West Michigan Jobs Group promotes independent businesses and sustainable industries in the West Michigan area. As the Executive Director of that organization he has advocated renewable energy as both a clean energy alternative for Michigan and a new industry with which to diversify our economy and spark Michigan innovation and jobs.

Read more stories by Eric Justian