Amid challenging market conditions, a coalition of U.S. based solar manufactures is demanding that the Obama administration take more aggressive action against alleged unfair competition from China.
SolarWorld USA, the U.S. subsidiary of the vertically integrated Germany solar conglomerate SolarWorld Industries, today filed complaints with the Commerce Department and the U.S. International Trade Commission. Six other U.S. firms joined in the filings.
The complainants say that China is giving its domestic producers an unfair advantage through an illicit combination of cash grants, sweetheart loans, and tax incentives, in addition to currency manipulation and markdowns on raw materials.
They are asking that dumping and subsidy duties be placed on Chinese imports. "Let us be clear, China has a plan for our market--to gut it and own it," Gordon Brinser, president of SolarWorld Industries Americas, told the press.
It bears mentioning that the U.S. also subsidizes renewable energy through Department of Energy loans, and the U.S. military only buys home built renewable technologies.
The Obama administration has stated that China was illegally subsidizing its renewable energy sector. It also sought to diversify the industry’s supply chain, because China has a monopoly on the rare earth minerals that are required by solar and wind turbine manufacturers.
A leading Chinese manufacturer, Suntech, advised U.S. politicians not to engage in “protectionism,” which it said would place jobs at risk and hamper solar power’s ability to compete with more traditional energy sources.
I expect that we’ll hear more about this topic in the build up to the 2012 U.S. Presidential election. Democrats are moving forward with hearings and legislation addressing Chinese imports, with some Republican support. Other Republicans questioned the viability of the U.S.'s ability to compete against China.
The G20 has refrained from taking action on currency manipulation, and the Obama administration has shelved an anticipated report on the issue. A Treasury Department report in May found that China’s yuan was undervalued, but not being manipulated.
The Chinese government has been assertive in its responses to U.S. accusations of unfair trading practices, briefly freezing exports of rare earth minerals to United States in 2010. It is likely to take a similar tact in the future.
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