Finally, the merits of the actual case are dubious. Prices of Chinese-made PV modules in China are lower than they are outside of China, so it’s hard to see how they are “dumping” on the U.S. market. The true problem is overcapacity, which market forces will correct in time. The Chinese government has undoubtedly provided support to its solar industry, but so has the US government with its loan guarantees, investment tax credits, and production tax credits. At the local level, SolarWorld Industries America (the lead filer of the complaint) itself received millions in tax breaks and subsidies in Oregon when it decided to locate its manufacturing facility there. Indeed, the Commerce Department only found evidence of small Chinese subsidies in its March 2012 ruling. SolarWorld only had six co-filers, but more than 100 U.S. firms lined up against it.
Chinese government support for solar energy has already benefited the world in terms of improved welfare, climate mitigation, and reduced global energy prices. The rest of us are essentially free-riding on this support. Rather than punish China for its laudable efforts, the Obama Administration should applaud it and do its part to correct market distortions too.Read it at TripleCrisis
Blinded by the (solar) light
By Kelly Sims Gallagher and Kevin P. Gallagher
Follow up to the post on Misguided Mercantilism Hurts Solar Energy Consumers. Last night I was discussing this topic with an expert friend of mine who currently works in the Solar industry. He basically outlined this entire report making special note of the ability of Chinese firms to avoid the tariffs. While this lessens the negative impact, we ultimately agreed the policy is still a step in the wrong direction and risks unnecessary trade wars with China.