On December 31, 2013, SolarWorld Industries America (SolarWorld), a U.S. manufacturer of solar panels, petitioned the Department of Commerce (Commerce) and the International Trade Commission (ITC) for additional tariffs on imports of solar products from China and Taiwan that SolarWorld alleges are dumped (sold at less than fair value) and/or on Chinese products that benefit from Chinese government subsidies.  This is the second U.S. antidumping/countervailing duty case brought against solar products from China and the first against solar products from Taiwan.  Headquartered in Hillsboro, Oregon, SolarWorld is the U.S. subsidiary of SolarWorld AG of Germany.

SolarWorld initiated a previous case against solar products from China in 2011.  After finding that Chinese solar companies were subsidized and were dumping certain solar cells in the U.S. market, the United States imposed antidumping and countervailing duties ranging from 23.75% to 254.66%.  (Several Chinese manufacturers that participated in the proceedings received lower rates; those not participating received the 254.66% rate.)

In a related European Union (EU) proceeding, China and the EU agreed in July and August 2013 to restrict Chinese exports of solar products to the EU in exchange for settling pending antidumping and countervailing duty investigations of Chinese solar products.

SolarWorld filed the new petition to close a “loophole” in the previous case.  SolarWorld claims the loophole has allowed Chinese companies to avoid duties by assembling solar panels from cells produced in other countries, including Taiwan, from Chinese components.  To close this loophole, the new petition targets Taiwan and covers “cells completed or partially manufactured within a customs territory other than the subject country, using ingots, wafers, or partially manufactured cells from the subject country.”  Cells are manufactured from silicon ingots (blocks) and wafers (slices).  Products already subject to the original orders against China are excluded from the new investigation.

Specifically, the scope of the investigation includes crystalline silicon photovoltaic (c-Si PV) cells and modules, laminates and/or panels of c-Si PV cells, whether or not partially or fully assembled into other products, including building-integrated materials.  The petition covers imports of certain solar products entering the United States under U.S. Harmonized Tariff Schedule classifications 8501.61.0000, 8507.20.80, 8541.40.6020 and 8541.40.6030.

The petition excludes thin-film photovoltaic products produced from amorphous silicon (a-Si), cadmium telluride (CdTe) and copper indium gallium selenide (CIGS).

Under U.S. law, once a U.S. industry has petitioned the government for relief from imports, Commerce determines whether dumping or subsidizing exists and, if so, the margin of dumping or amount of the subsidy.  The ITC determines whether there is material injury or threat of material injury to the domestic industry by reason of the dumped or subsidized imports.  The ITC must complete its preliminary investigation within 45 days of the receipt of the petition, in this case by February 14.  If the ITC preliminary determination is affirmative, Commerce will continue its investigation.  If the ITC determination is negative, the investigation is terminated.  If a case continues through a Commerce and ITC final determination, the investigation generally is completed within a year after the petition is filed.

For more information about the case and how it may affect a company’s supply chain, please contact counsel.

© 2014 Perkins Coie LLP