International Trade & Compliance Advisory - New Solar Panel Unfair Trade Cases

On December 31, 2013, SolarWorld Industries America Inc. filed petitions with the U.S. government seeking antidumping and countervailing (anti-subsidy) duties on U.S. imports of Chinese and Taiwanese crystalline silicon photovoltaic ("CSPV") products. These new cases are to build on cases that resulted in duty orders against Chinese CSPV products beginning in December 2012 and on CSPV unfair trade cases in Europe. Orrick is well positioned to advise producers and importers of solar panels and panel components affected by the unfair trade cases and to advance their interest before U.S. decision-makers.

Scope of Imports Covered by Cases

Imports that are the subject of unfair trade allegations include entries from China and Taiwan of CSPV cells, modules, laminates and panels, along with modules, laminates and panels partially or fully assembled into other products (e.g., building integrated materials). To close a coverage "loophole," this "Subject Merchandise" is now to include modules, laminates and panels made in China or Taiwan from CSPV cells manufactured outside of China and Taiwan. The Subject Merchandise does not include thin-film photovoltaic panels.

The new antidumping cases are to cover China and Taiwan. The new countervailing duty (anti-subsidy) case is to cover only China.

Alleged Dumping and Subsidies; Duties

The petitions allege dumping by Chinese and Taiwanese exporters of Subject Merchandise and government subsidization of Chinese producers and exporters of Subject Merchandise. Dumping is the selling of goods below "fair value." As to China, fair value generally means the estimated, fully loaded cost of producing the product, often employing surrogate unit costs from a "market economy" (here, Thailand). The petition alleges dumping margins of well over 200 percent and a subsidy rate of 16 percent.

To succeed, the U.S. petitioner must establish dumping, subsidization or both, and must establish that imports of Subject Merchandise are injuring or threaten to injure U.S. CSPV producers. If the cases are successful, then duties (tariffs) will be imposed on imports of Chinese Subject Merchandise, Taiwanese Subject Merchandise or both - again, building on December 2012 duty orders covering CSPV cell and panel imports from China.

Duty rates would account for combined rates of dumping and subsidization found by the U.S. Commerce Department, and they could be import-prohibitive. Duties could apply retroactively to Subject Merchandise...