WASHINGTON – (December 17, 2014) The U.S. Department of Commerce (DOC) announced significant new tariffs between 12 and 80 percent on solar energy products imported from China and Taiwan, closing a loophole that allowed China to skirt tariffs implemented in 2012. The Information Technology and Innovation Foundation (ITIF) applauds the DOC’s decision and releases the following statement:
The United States and China are locked in a protracted solar trade war that is entirely of China’s doing. Rather than building a robust solar industry founded on innovation and fair competition, China has unleashed an unprecedented and illegal arsenal of “green mercantilist” policies to bankrupt any and all competitors through the use of product dumping, unfair domestic subsidies, and cyber-attacks to steal trade secrets.
As a result, the United States has no choice but to level the playing field with import tariffs to not only allow open competition in the solar industry, but to also allow solar innovation to thrive. China’s green mercantilist policies have had a chilling effect on solar innovation. Solar firms have cut their investment in solar research and development (R&D) to try and compete with artificially low cost Chinese solar panels. And solar manufacturer bankruptcies caused by Chinese solar policies have wiped out many small, innovative firms, dramatically slowing the development of next-generation technologies.
Unfortunately, many solar advocates only see DOC’s decision through the lens of short-term profits. China’s green mercantilism has significantly lowered the cost of installing solar panels, providing a boost to deployment in the United States and abroad. This short-term boost comes with a cost though. Artificially cheap Chinese solar panels mean less market competition, less innovation, and ultimately less-competitive solar products in the future. In other words, critics of DOC’s decision are focused more on short-sighted gains today at the cost of long-term industry decline tomorrow.
For more information on green mercantilism and China’s solar policies, refer to Green Mercantilism: Threat to the Clean Energy Economy and the recent article, U.S.-China Solar Trade Dispute: Short-term Profit vs. Long-term Viability.
