The US Commerce Department will begin imposing duties on wind tower imports from China, after finding that producers receive unfair government support. The move is expected to ratchet up tensions between the two trading partners, which have escalated quickly over the past few months over competing claims from both sides of illegal support and dumping of renewable energy products.
The 30 May decision comes in response to a December petition filed by the Wind Tower Trade Coalition (WTTC) - a group of four US wind tower companies - which alleges that Chinese imports are being unfairly subsidised, thus hampering the competitiveness of the US wind power industry as a result.
The US imported US$222 million in Chinese wind towers last year, according to US government data.
The US government agency found that Chinese producers/exporters have received unfair government support ranging from 13.74 to 26 percent of the cost of the towers, meaning that the US can apply a countervailing - or anti-subsidy - duty equivalent to that same amount.
“This is an important step in remedying the harm caused by unfairly traded wind tower exports,” Alan Price, lead counsel to the WTTC, said in response to the decision.
The announcement was quickly panned by Chinese officials, who argued that such conflicts should instead be resolved by negotiation and consultation. “Readily resorting to protectionist measures is not conducive to China and the US continuing to co-operate in the trade and economic fields,” Chinese foreign ministry spokesman Liu Weimin told reporters last Thursday.
Chinese industry representatives similarly criticised the decision, with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) - a nationwide trade organisation - cautioning that such duties could have a “negative impact” on the renewable energy industry in the US, given large-scale US wind power operators’ preference for the Chinese products.
Commerce is scheduled to make a final determination regarding wind tower duties in August, with the International Trade Commission’s (ITC) final determination scheduled for September. If both determinations are affirmative, Commerce will impose the countervailing duties.
The US agency is also investigating whether Chinese and Vietnamese manufacturers are selling wind towers at prices below their normal market value - a practice known as dumping - on the US market, with a decision on that subject expected in late July.
Complaints from both sides
The Commerce Department decision comes at a time of heightened trade tensions between the US and China, with the two countries clashing repeatedly in recent weeks over their support programmes for their respective renewable energy sectors.
Last month, Commerce - in a separate investigation - deemed that Chinese solar panels were being dumped onto the US market and announced duties as a result. Earlier this year, the agency also announced countervailing duties against solar panel imports from China, as part of the same probe.
The solar panel and wind tower duties announced by Washington are among several countervailing duty measures now being challenged by China at the WTO, with Beijing filing a request for consultations - the first step in the global trade arbiter’s dispute settlement process - on 25 May (DS 437).
Beijing, for its part, has also claimed that US government support for six renewable energy programmes is inconsistent with WTO rules, after having conducted an internal investigation into Washington’s policies regarding wind, solar, and hydro technology products. What action China will take following this determination, however, has yet to be made clear.
ICTSD reporting; “UPDATE: China Industry Group Says Wind Tower Tariffs May Hurt U.S. Industry,” DOW JONES NEWSWIRES, 31 May 2012; “UPDATE 3-Chinese wind towers hit with U.S. tariffs,” REUTERS, 31 May 2012.
