China Increases Taxes on Solar Panels

Monitoring a solar panel in the production line at a factory in Zhejiang province in China

         China's Minister of Commerce had announced on Thursday that China plans to impose tax tariffs that could exceed 50% on materials imported from the United States and South Korea to make solar panels due to the tension lingering with the West over a trade dispute. This decision, which is to go in effect next week, would be a catastrophe to the American industry for China is supposedly their largest customer for solar-grade poly-silicon, the main ingredient needed for making solar panels. 

         China dominates the world market in terms of solar panel production, exporting approximately $30 billion a year in panel shipments to the West while it imports a large number of poly-silicon from the United States, Europe and Korea. Its decision to heavily tax the United States but levy lower rates on some Korean producers and leave Europe out is widely seen as a retaliation act for the previous trade incidents occurring between the United States and China. 

         Last Fall, the United States had put tax tariffs (of about 24-36%) on Chinese imports after finding out that Chinese companies were benefitting from unfair government subsidies and selling their products below the cost of production. A spokeswoman for Michael Froman, the United States trade representative, had responded that they were in discussions with China related to global issues in solar technology and that this step did not move the ball forward, but "we will continue to engage." 

         Senator Ron Wyden, Democrat of Oregon, and Chairman of the Committee on Energy and Natural Resources notes that "China is slapping tariffs on poly-silicon because it is unhappy that the United States exercised its legal rights and stood up for our remaining solar manufacturers. I am confident that these retaliatory tariffs will be shown to be without merit."