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Climate Progress

Department Of Commerce Slaps Large Tariffs On Chinese Solar Modules

By Stephen Lacey on May 17, 2012 at 6:38 pm

In a long-awaited decision, the U.S. Commerce Department has issued a preliminary decision to apply tariffs to Chinese-made solar modules being imported into the U.S. The tariffs range from 31 percent to 250 percent.

The preliminary tariffs were issued after a lengthy investigation by the Commerce Department into whether Chinese companies are “dumping” solar panels into the U.S. market below cost. These tariffs follow a March decision to issue small countervailing duties on Chinese module producers that are getting illegal domestic subsidies, according to Commerce.

Today’s issued tariffs are as follows: Trina, 31.14 percent; Suntech, 31.22 percent; and 31.18 percent for all other Chinese producers that participated in the investigation. For companies that did not participate, Commerce has slapped a massive preliminary tariff of 249.96 percent.

The combination of these new tariffs and the countervailing duties will add substantial cost to imported Chinese solar panels. With panel prices hovering in the $1 per watt range, it could add around 30 cents a watt to each panel for leading producers, and vastly more for producers that didn’t get involved in Commerce’s investigation.

These are preliminary fines and can be negotiated and changed before Commerce makes a final decision. The solar industry’s trade group, the Solar Energy Industries Association, has called on the U.S. and Chinese governments to negotiate a settlement — potentially resulting in more moderate tariffs:

“The solar industry calls upon the U.S. and Chinese governments to immediately work together towards a mutually-satisfactory resolution of the growing trade conflict within the solar industry.  While trade remedy proceedings are basic principles of the rules-based global trading system, so too are collaboration and negotiations.

“Importantly, disputes within one segment of the industry affect the entire solar supply chain–and these broad implications must be recognized.  In addition, the U.S. solar manufacturing base goes well beyond solar cell and module production and includes billions of dollars of recent investments into the production of polysilicon, polymers, and solar manufacturing equipment, products which are largely destined for export.  If the U.S.-China solar trade disputes continue to escalate, it will jeopardize these U.S. investments.

“Given these broader implications, it is imperative that the U.S., China, and other players in the dynamic global marketplace work constructively to avert or resolve trade disputes that will ultimately hurt consumers and businesses throughout the solar value chain.”

The solar industry has been on edge since last October, when the manufacturer SolarWorld and six other anonymous companies issued a complaint about illegal trade practices. They argued that China’s subsidies were allowing companies to dump panels below cost, thus driving U.S.-based manufacturers out of business.

However, downstream developers have enjoyed falling panel prices — a factor that has allowed the industry to expand 109% in 2011. A group of solar companies known as the Coalition for American Solar Energy has been staunchly opposed to tariffs, saying they’ll dramatically drive up the cost of solar installations in the U.S.

Update

CAP’s Analyst for China Energy and Climate Policy issued a statement on trade enforcement:

Read more

Climate Progress

China’s Solar Industry Should Be Held Accountable For Breaking Trade Laws

By Climate Guest Blogger on May 16, 2012 at 9:33 am

by Kate Gordon

A simmering trade dispute between the U.S. and China will likely come to a head tomorrow when the U.S. Department of Commerce issues its determination on alleged trade violations by Chinese solar manufacturers.  Surprisingly, the U.S. solar industry is not in agreement on the need to hold the Chinese accountable.  It should be.

On one side are those who claim China has been illegally subsidizing and dumping its solar products in the U.S. market, forcing many American manufacturers into bankruptcy.  These companies, mostly manufacturers of solar panels and related products, claim Chinese solar companies have benefited from government largesse in the form of free land and facilities, electricity and water, and low- or no-cost loans that keep prices for Chinese-made solar products artificially low.  In addition, they claim these Chinese companies are illegally “dumping” their cheap solar panels into the American market, making it nearly impossible for U.S. manufacturers to compete.

On the other side are those, mostly solar installers, who have benefited from the ability to buy low-cost solar panels, which they claim has allowed them to do solar installations at a lower cost and therefore expand the use of solar power in America.  This group of U.S. companies argues that U.S. manufacturers can’t compete with the Chinese when it comes to solar panel production, because the Chinese are simply more efficient and can do production at a lower cost.  They also worry that pursuing a trade case will incite a “trade war” with China, which will erode their profit margins, slow U.S. industry growth across the value chain, and make it even harder for solar energy to compete with traditional fossil fuels.

Both sides have compelling arguments.  So who’s right?

One way to answer that question is to say that we’ll find out who’s right when the Department of Commerce issues its findings.  Commerce has already found that China is unfairly subsidizing its solar industry, and has imposed tariffs on Chinese solar manufacturers as a result.  The upcoming decision, on whether China is also illegally dumping those panels into the U.S. market, may bring larger tariffs if China is found to be in violation of our mutually-agreed-upon, and heavily negotiated, trade agreements.  The entire point of the trade enforcement regime is to figure out whether a country is in fact breaking the rules, and if so, to issue sanctions. It’s a system based on the rule of law, something we Americans hold dear, and for good reason.

But would a decision against China undermine America’s emerging solar energy industry? There is no question that solar energy faces an uphill battle in the U.S.  The combination of century-old subsidies to fossil fuel companies and the lack of any real national commitment to renewable energy makes it difficult for emerging energy technologies to compete here.  But that doesn’t mean that the United States needs cheap Chinese solar panels so badly that we should just roll over and let a foreign government break enforceable international trade rules.  If Commerce finds that the Chinese government has acted illegally, then the Chinese government and the industry it is subsidizing should pay a price for that behavior.

Our faith in the rule of law is too important for us to abandon our international trade obligations in favor of cheap imported solar panels.  So, too, is our need to support the U.S. manufacturing sector by protecting it from unlawful trade practices.  Manufacturing is a crucial piece of the U.S. economy. Our ability to stay innovative and competitive in a time of intense global pressures relies on manufacturing companies, which contribute fully 70 percent of all the private research and development spending in America.  And these companies are major job creators: a recent report by SEMI found that manufacturing jobs had the highest job multiplier of any segment of the American economy.

That’s why we should be supporting clean energy manufacturers in their efforts to compete with China, through programs like the Clean Energy Manufacturing Tax Credit program that President Obama recently urged Congress to extend, or through Senator Sherrod Brown’s “Security and Energy in Manufacturing Act,” rather than punishing them for trying to compete on a level playing field. Because that’s the crucial point:  every American company should be able to compete on a level playing field in the international marketplace.  That’s good for solar manufacturers in the current case, but it’s good for all American companies – and for our economy as a whole – in the long run.

Kate Gordon is vice president for energy policy at the Center for American Progress.

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Economy

How Delta Airlines And Eric Cantor Are Trying To Strangle U.S. Exports

By Pat Garofalo on Mar 16, 2012 at 2:10 pm

As we’ve noted, Republicans are are bogging down an attempt to reauthorize the U.S. Export-Import Bank — which helps companies access capital to sell their products abroad — on the grounds that it’s too much government intrusion in the free market. The agency isn’t even funded by taxpayers (though the agency does provide loan guarantees that are backed by tax dollars), but conservatives are still throwing a fit about Democrats’ desire to reauthorize the agency and increase its loan limit from $100 billion to $140 billion.

One of the loudest corporate voices arguing against the bank’s reauthorization is Delta Airlines, while one of the loudest arguing against it in Congress is House Majority Leader Eric Cantor (R-VA). And as Politico noted today, Delta and Cantor have more than this policy agreement in common:

A sleepy Export-Import Bank debate in Congress has blossomed into a corporate political brawl matching the powerful Boeing Co. lobby against Delta Air Lines, represented here by a close friend and supporter of House Majority Leader Eric Cantor.

The issues are bigger than the personalities, affecting billions of dollars in U.S.-backed loan guarantees supporting the overseas sale of Boeing aircraft. But with pivotal Senate votes now scheduled for Tuesday, Cantor is without a doubt the crucial broker for the House. And Boeing is hammering away at his close ties with Delta lobbyist and confidante Andrea Newman — even as it fields a small army of its own.

If it seems David vs. Goliath, Newman, as Delta’s senior vice president for government affairs, comes with a BlackBerry instead of a slingshot. In an anecdote Cantor’s office denied Friday, he is said to have once emailed her about an aviation bill while still in a members-only meeting with the White House on the subject. And the two enjoy what’s described as a genuine family — University of Michigan — friendship even as she helps him raise campaign funds.

In addition to gumming up the works on the ExIm bank, Delta has been on the wrong side of many a policy fight recently. It’s worst work was pushing Republicans to include a union-busting provision in a bill reauthorizing the Federal Aviation Administration, while ultimately led to an FAA shutdown.

As CAP’s Sabina Dewan has explained, the ExIM bank (yes, in addition to providing some help to giant manufacturers like Boeing) is crucial for smaller exporters that have a hard time accessing financing. But it’s evidently more important for Cantor and crew to throw Delta yet another bone, at the expense of the wider economy.

Economy

GOP Lawmakers Move To Block Program That Helps Small Businesses Boost U.S. Exports

By Guest Blogger on Mar 13, 2012 at 4:35 pm

Our guest blogger is Sabina Dewan, Director of Globalization and International Employment at the Center for American Progress Action Fund.

Republican lawmakers are moving to block a job-creation package because it includes a provision that would help U.S. companies access the capital they need to sell their products and services abroad. The party of no’s latest target is the U.S. Export Import Bank (ExIM) — the government agency that provides loans, guarantees and insurance products to enable US companies, especially small businesses, to export.

The ExIm Bank’s charter caps its overall outstanding commitments at $100 billion and Senate Democrats are seeking to raise the cap to $140 billion and reauthorize ExIm for another four years.

But this doesn’t sit well with conservative lawmakers. They object to the reauthorization calling Ex-Im’s activities “corporate welfare” that distorts the free market. House Majority Leader Eric Cantor suggested that, instead of reauthorizing the bank, the U.S. talk to our major trading partners to get them to “end subsidized export financing programs and other forms of export subsidies.”

By all means, lets talk. But in the meantime, there’s no need to pull the rug out from underneath firms and workers that export now. After all, at a time when millions of Americans are unemployed, we need to do everything in our power to create jobs by helping businesses export more — not cut off their financing to do so.

What GOP lawmakers forget is that state-capitalist economies like China don’t abide by our free market rules. Their state-owned enterprises provide seemingly unlimited access to cheap capital. Cutting off ExIm’s ability to finance exports, especially for some of our most competitive sectors like aerospace, will seriously hurt American workers and firms.

What’s more, phasing out Ex-Im’s financing will disproportionately affect America’s small businesses, which are a critical source of middle class jobs and incomes. While large firms with big operating budgets can either afford to finance their own operations or obtain bank financing, small businesses don’t have access to credit because they are considered a riskier bet. They turn to ExIm for their export financing instead.

Not only should Congress immediately reauthorize Ex-Im to operate for another four years, it should raise the bank’s statutory cap well beyond $140 billion to benefit America’s companies, their workers and to create more jobs. And this doesn’t cost us anything — Ex-Im is self-sustaining and even profitable.

This latest ploy by conservative lawmakers is no more than an attempt to stymie the real progress the Obama administration has made on boosting our nation’s exports.

Alyssa

China Opens Its Market to American Movies—While Cracking Down on Television

By Alyssa Rosenberg on Feb 21, 2012 at 6:37 pm

It is, of course, a good thing for the American movie industry that China and America have resolved their dispute over market access, and the number of American movies released in China is set to rise from 20 to 14. That’s not huge overall compared to the number of movies that come out of American studios every year, but ut Chinese moviegoers spent $2 billion at the box office last year, and that number’s supposed to rise by 20 percent this year.

There are limitations, of course—those 14 movies all have to be Imax or 3D editions of movies. So the pictures that can make it overseas are somewhat limited by what the studios are already shooting in those formats or willing to convert, and that likely means more big blockbusters rather than small but clever indies. I’m torn between wanting to see more of that money come back to American moviemakers and knowing that it’ll likely increase the profit margins on precisely the movies that don’t need the extra proof that they’re successful. Maybe I can have it both ways, and those jacked-up margins will give studios a little more permission to experiment with smart original ideas because they’ll have more of a cushion to absorb those projects if they fail.

It’s also worth a reminder that at the same time that China’s opening up its movie market, it’s banned all imported television during primetime broadcasts and issued new regulation saying that no channel can have more than a quarter of its programming be imported. Abiding by one World Trade Organization ruling doesn’t mean that China’s given up on trying to protect the growth of its domestic entertainment industry. And it doesn’t mean the regime’s about to let in a lot of entertainment that might undermine the values it’s trying to promote. If I was trying to maintain a vaguely Communist economic system, I’d be a lot more concerned about the plucky entrepreneurialism of 2 Broke Girls than the loud and goofy fantasies of the Transformers movies.

Alyssa

How Will Season 2 Of ‘Game of Thrones’ Handle Governance?

By Alyssa Rosenberg on Dec 12, 2011 at 1:37 pm

Such is my investment in Game of Thrones that this trailer, which gives us brief looks at the characters looking…basically like themselves without much context, can still get me pretty excited:

[SPOILERS IF YOU HAVEN'T READ THE NOVELS TO FOLLOW]

I think the biggest question for me will be how the second season of the show handles the themes of governance that are so important to A Clash of Kings. Other than Jon Snow’s attempts to reform the Wall, the struggle between Joffrey and Cersei on one side and Tyrion on the other over how to run King’s Landing — and by extension, the realm — is one of the few experiments in and debates over governing philosophies we ever see in action. Cersei’s devoted all of her efforts to bolstering the hard power of King’s Landing, recruiting new men into the City Watch, spending coin on wildfire, displaying heads on walls, and paying for it all with a tax that’s throttled already constricted trade. Tyrion comes in and shifts the balance, opening up trade, making a deal with the city’s armorers that both bolsters their trade and lets him prepare to wage unconventional warfare, and takes the heads off the walls in an effort to make the regime less savage. He institutes actual diplomatic relations with Dorne, which you think someone else might have considered at some point earlier, given their utterly badass reputation.

He’s not perfect, of course. The riot that sweeps the city is an augury that neither Tyrion or Cersei read fully (much to the latter’s dismay later) — it always surprises me that Cersei and her advisers are caught off-guard by an upswing in religious fervor during times of insecurity. The fact that even the Lannister who loves learning, who actually has the intellectual curiosity to want to see the end of the world, can’t accept what Ser Allister Thorne is telling him about the White Walkers on the border suggests something powerful about the limitations of our collective ability to grapple with the monstrous and unthinkable. And Tyrion is too personal when it comes to reforming the Small Council, failing to appreciate Maester Pycelle’s abilities and connections (and given the scene the show gave us of his secret vigor, I wonder if he might not resist Tyrion more strongly than in the novels).

All in all, it’s a parable for the dangers of allowing your governance to become personal. Tyrion is doomed to failure when his rule becomes as much about discipling Joffrey and proving his father wrong about his abilities. Both are futile tasks. Joffrey’s already a hopeless sadist with an elevated sense of his own wisdom by the time Tyrion gets anywhere close to him. Tywin ultimately turns out to be flexible, but not in ways that lend him strength or reason. King’s Landing might have turned out to be genuinely salvageable, the unbreakable link in a chain of Lannister defenses. But disciplining these three generations of Lannisters or restoring them to decency isn’t a project worth Tyrion’s considerable talents.

Special Topic

12 Years Ago Today, Massive Protests Shut Down The WTO Meeting In Seattle

By Zaid Jilani on Nov 30, 2011 at 4:05 pm

An iconic photo of protesters being tear gassed.

As Americans watch the 99 Percent take to the streets and engage in protest actions as a part of Occupy Wall Street and other demonstrations, it is important for us to remember our nation’s rich history of social protest movements.

In many ways, the modern American protest movement — one that is Internet-savvy, diverse, and inclusive — was born on November 30, 1999 — exactly 12 years ago today. On that day, thousands of Americans and foreign activists who visited to take part effectively shut down the World Trade Organization ministerial meeting in Seattle, angry at what they viewed as the organization’s disregard for labor and environmental rights.

Using widespread civil disobedience, protesters were able to keep international delegates from getting to the trade meeting. Police wildly overreacted, and engaged in brutality that often injured innocent bystanders. Future trade meetings met in remote locations like Cancun, Mexico just to avoid similar demonstrations. IMC and Big Noise Films made a short documentary about the protests. Watch it:

Interestingly, former Seattle Police Chief Norm Stamper — who was in charge of the police force during the protests — has become an advocate for reforming policing in the United States. He recently condemned the militarization of the police and use of heavy-handed tactics against 99 Percenters.

Alyssa

HBO Is Doing A ‘Wolf Hall’ Miniseries

By Alyssa Rosenberg on Nov 18, 2011 at 4:07 pm

Back in June, I put Hilary Mantel’s masterful novel about Thomas Cromwell and Henry VIII, Wolf Hall, on my Introductory Guide to Women-Centered Culture For Guys syllabus. Now, HBO’s making a miniseries out of it.

This is great news for a couple of reasons. First, if it’s done right, the adaptation will be a great look at — in addition to the birth of the Church of England — European trade, the consolidation of church properties that led to the founding of Cardinal College at Oxford, and the allegations that Thomas More actively promoted the torture of Protestants during the lead-up to England’s split with the Catholic Church. Wolf Hall is a phenomenal novel about personal investment in politics. Watching Thomas Cromwell escape his father’s vicious abuse through the kindness of Amsterdam’s cloth merchants and the mercenary armies of the continent; Cardinal Wolsey fret over the future of the college he wanted to make a jewel; or the cold home More builds to prop up the edifice of his righteousness, the show builds a complicated definition of the means and costs of being a genuinely world-historical figure.

And for all that it’s big, it’s a strikingly personal novel. We see what it means to be sold off for your chastity, the cost of being an object of obsessive pursuit in a way that makes a mockery of Twilight. It’s a shame that Natalie Dormer already played Anne Boelyn in The Tudors so she can’t take on a more nuanced version of the role here. Cromwell’s relationship with his late wife, and later, with her sister, who is married to another man, are infinitely tender. The loss of his daughter, the disappointment of his son, sting like whips. And it’s a marvelous novel of friendship, whether it’s Cromwell and Wolsey or Cromwell and Imperial diplomat Eustace Chapuys. I don’t really know how a miniseries will capture the Cabinet of Wonders-like effect of the novel, which is one of the most effective evocations of a historic worldview I’ve ever read. But I’m glad it’s not getting reduced to a movie, and that some serious writerly fire-power will be behind it. HBO’s movie team has been wildly on their game lately, so I can’t wait to see what they do with this.

NEWS FLASH

New Korea, Colombia, And Panama Trade Agreements Advance In Senate And House | This evening, the House of Representatives voted to advance trade agreements with Panama, South Korea, and Colombia. The vote for the Colombian trade agreement was most contentious, with all but 31 House Democrats voting against the agreement and only 9 Republicans voting “no.” As of this writing, the Senate has also voted to approve both the Panama and Colombian trade agreements, with 66 senators voting in favor of the Columbian agreement and 77 senators voting in favor of the Panama agreement.

By Zaid Jilani on Oct 12, 2011 at 10:57 pm

Yglesias

Tourism Stimulus

By Matthew Yglesias on Oct 3, 2011 at 3:14 pm

Chinese manufacturing is more likely to compete with low-wage manufacturing in other developing countries than it is to compete directly with U.S. manufacturing. Still, as Paul Krugman explains, that doesn’t mean that currency realignment wouldn’t alter our trade balance.

One mechanism Krugman doesn’t mention is that a pricier RMB would mean higher incomes for Chinese people. That means they’d buy more American stuff. That’s not just export-oriented U.S. manufactured goods, its also our bounty of agricultural exports and even things like taking more trips to the United States and buying stuff while they’re here. Net tourism is an important and growing export industry for the United States, and serves as a valuable form of stimulus for the large majority of Americans who don’t work in the manufacturing trade. Stronger foreign currencies mean more demand for our hotels, our restaurants, and our transportation system as well as for our manufactured goods.

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