US manufacturers asked Obama administration to impose duties

DALLAS, Texas - A trade complaint filed against China by a group of solar companies drew skeptical reviews from inside the industry, with many fearing a trade war could disrupt growth.

On Wednesday, seven US solar manufacturers asked the Obama administration to impose duties of more than 100 percent on Chinese imports, which they said were unfairly undercutting prices and destroying jobs in the US.

China's commerce ministry said on Friday that the country regrets the trade action and warned that exports of US solar-energy equipment and materials to China will fall as demand will decline because of the possible duties.

Many US and European companies supply China's industry with products used to make solar cells, while others end up buying those finished cells to put in their own solar modules.

"It's a really difficult issue for everyone," said Tom Hecht, head of US sales for Germany's Schott Solar AG. "Any trade war is damaging to the industry."

Fear of triggering retaliation by the Chinese government or angering Chinese companies appeared to be the reason that six of the companies that filed the complaint chose to remain anonymous, several industry experts said.

Only SolarWorld Industries, the US arm of Germany's SolarWorld AG, made its name public.

China's solar industry has grown rapidly over the past five years, led by companies such as Suntech Power Holdings Co Ltd, Yingli Green Energy Holding Co Ltd and Trina Solar Ltd - all of which have shares traded on the New York Stock Exchange. Analysts and executives have blamed the rising output of panels from China for pushing some US companies into bankruptcy this year. A glut of solar panels has helped drive down prices by about 40 percent so far this year, shrinking margins for nearly all manufacturers.

Kevin Kilkelly, SolarWorld's US president, said the Chinese companies had flooded the United States with panels at cut-rate prices simply to win market share.

"In July alone, (China's US shipments) far outweighed those from all of 2010 combined," he said. "So we said we have to take action."

Suntech, the maker of solar panels, responded to the filing by saying it was well prepared to demonstrate its strict adherence to fair international trade practices.

Many executives from the United States and Europe have privately complained for years about China's impact on the solar markets, but most have also said the business has become so globalized that penalizing one country would not help companies that are struggling to survive.

Still others seem wary of triggering a trade war that could lead to foreign companies being shut out of China, which has become one of the world's fastest-growing centers of renewable energy.

First Solar Inc, the largest US solar company and the industry's lowest-cost manufacturer, has signed agreements that could result in it building huge solar power plants in China, although it has only been involved in modest pilot projects there so far.

"What we believe in is free and open market access here and everywhere else in the world," First Solar's Chief Executive Rob Gillette told reporters at the Solar Power International trade show in Dallas this week.

Trade relations with China have become a hot issue ahead of the 2012 US presidential and congressional elections.

Last week the Senate passed a bill aimed at Beijing's currency practices, but the proposal faces an uphill battle in the House of Representatives.

"The outside world looking at renewables as a whole says: 'Well, this is just proof that solar is not a business yet - let's just ignore it for another five years,'" said Julian Hawkins, head of sales and marketing for the US manufacturer Abound Solar Inc.

"I'm not really sure at times that people go through all the repercussions."

Reuters

(China Daily 10/22/2011 page10)