On October 19, seven American solar manufacturing companies asked the government to slap 100% tariffs on Chinese solar imports alleging unfair trading practices. The Coalition for American Solar Manufacturing’s President Gordon Brinser said, “Chinese producers have used – and continue to use – continuous increases in production capacity and output, fueled by unprecedented levels of subsidization, to push enormous quantities of dumped and illegally subsidized PV cells and panels into the US market at artificially low prices. This drive is undercutting fair market value and threatening to decimate US solar manufacturing employers.”
He added, “We have joined together as an industry because the level of illegal subsidies and dumping that the Chinese government has mounted is simply intolerable. American solar manufacturers can compete with any Chinese manufacturers, but not with the entire government of China.”
The Chinese government, not surprisingly, disagrees. Reuters reported that an unnamed official said in a statement posted on the Chinese Commerce Ministry’s website (www.mofcom.gov.cn), “If the US government files a case, adopts duties and sends an inappropriate protectionist signal, it would cast a shadow over world economic recovery. The Chinese government hopes the United States will scrupulously abide by its promise to oppose trade protectionism, avoid adopting protectionist measures on Chinese solar cell products, jointly protect a free, open and fair international trade environment, and adopt more rational means of handling trade frictions.”
In support of its position, the Beijing government noted that the US solar industry has a $1.9 billion surplus in its trade with China. The statement also claimed “The US has no reason to criticize other countries’ efforts to improve the world’s environment, and should instead strengthen cooperation with other countries in the solar energy sphere to jointly respond to climate and environmental challenges.”
The coalition answered this in a press release on Friday that pointed out “Beyond this one case, China’s solar-industry’s significant abuse of China’s environmental landscape has been well-documented since at least early 2008. If the government of China and its state-sponsored solar industry are concerned about the environment, they should develop a solar market in their own country, stiffen their environmental rules to match western standards and produce solar products using the same high environmental standards followed in the United States.”
The essence of the problem is the neo-liberal approach to trade that America has pursued since the Reagan administration. Free trade with other liberal developed democracies is perfectly reasonable and will follow what we all learned in Econ 101 – that comparative advantage will enrich the nations involved. However, China is not a free-market capitalist nation but rather a state capitalist, nominally communist society, one that still has labor camps and political prisoners. Expecting trade between the US and China to follow the usual laws of economics is folly.
By all means, let America and China trade, but China is not Canada. This dispute needs to go to the WTO, and the Obama administration needs to fight for it tooth and nail. If not, the US solar manufacturing industry will go the way of the US TV and electronics industry.
