Trade groups in the United States celebrated tariffs proposed by the United States government toward wind energy turbines supplied by China and Vietnam. The trade group had been pressing for tariffs due to claims that Asian competitors had been releasing underpriced products in the American market, stifling American manufacturers.
On Thursday July 26th, 2012, the United States Commerce Department released initial findings that manufacturers in China and Vietnam, which sent more than $300 million in tower exports to the United States last year, sold the goods significantly below their actual costs of production.
The department, which raised tariffs up to 73% for products made in China and 60% for goods made in Vietnam, took action after numerous complaints were brought forth by companies in the United States including Broadwind Energy Inc. In response, the traded stock value of Broadwind increased by 13% after the news was released yesterday.
According to the Commerce Department, the steel towers designed for wind turbines had been sold illegally by Chinese and Vietnamese manufacturers, and this process of dumping would be curbed by the new tariffs. The ruling came as welcome news to the four tower manufacturers in the United States that brought on the antidumping case.
Four findings have come out so far this year on the side of solar and wind manufacturers in the United States, and these latest findings are likely to increase the already significant levels of tension with the Chinese government and industries.
These industries in China have made it a priority to increase their manufacturing capacities for renewable and alternate energy technologies. The Chinese manufacturers have sold these goods to markets across the globe at lower prices, with solar panels standing out as a prime example of the Chinese approach.
Early in 2012, the United States Commerce Department handed out a ruling that stated that Chinese manufacturers had established a practice of selling underpriced solar panels to the American market.
As a result of the ruling, duties were increased to 31% on the majority of the imports, representing a significant increase to prior tariffs that had been imposed over the subsidies that the Commerce Department had deemed unfair.
Other manufacturers across the globe have followed the cases between Chinese and American manufacturers closely, and this past Thursday, close to 20 manufacturers in Europe collectively filed a case against dumping on the part of the Chinese with the EC, or European Commission.
The government in China has taken on the complaints by starting to look into whether Korean and American makers of polysilicon, the primary material used to make solar panels, had been selling polysilicon below the actual cost of the material.
Dumping is the recognized term for when companies out of the United States sell their products in the United States deliberately below the fair value of the products themselves in effort to gain leverage over the market.
In the current case with the wind turbines and towers, the United States Commerce Department will order customs agents at borders throughout the United States to start collecting deposits in cash that are equal to the initial duties imposed by the ruling.
These new duties will come as an addition to the existing tariffs of between 13% -26% that the Commerce Department had legislated in May of 2012 for what it had declared to be illegal and unfair subsidies in the wind turbine industry set by the government in China.
According to Alan Price, an attorney at the firm representing the wind manufacturers in America who launched the complaint, the Commerce Department has taken meaningful steps to target the large amounts of dumping that have been occurring due to Chinese and Vietnamese actions.
“Commerce has taken an important step to address the significant dumping that is taking place” and “will help to remedy the material injury already suffered by the U.S. industry and force the Chinese and Vietnamese producers to compete fairly,” Alan H. Price told the NY Times. Mr. Price is a lawyer at Wiley Rein that is representing wind turbine tower manufacturers.