Now the U.S. Attack Chinese Wind Towers with Tariffs

The US Commerce Department has once again imposed anti-subsidy penalties on Chinese renewable energy imports, this time of utility-scale wind towers.

The department issued a preliminary ruling on Wednesday in favour of a petition filed by the Wind Tower Trade Coalition, a group of US manufacturers of steel wind towers, and imposed countervailing duties (CVD) ranging from 13.74% to 26% due to unfair subsidies received by Chinese producers and exporters. This follows the department’s decision to issue both CVD and AD penalties against imports of Chinese solar cells and related products.

“The purpose of this case and the trade remedy laws is just to create a level playing field, to offset the level of unfair subsidies,” said Daniel Pickard, a Washington, DC-based partner with law firm Wiley Rein, who is counsel to the coalition.

The products covered by the decision are utility-scale wind towers, the steel towers that support the nacelle – the enclosure for an engine – and the rotor blades for use in wind turbines that have electrical power generation capacities in excess of 100 kilowatts. But the nacelles and rotor blades themselves are excluded, regardless of whether they are attached to the wind tower. The decision also excludes any internal or external components unattached to the wind towers or sections of the towers.

In 2011, imports of utility-scale wind towers from China were valued at an estimated $222 million.

The Commerce Department will instruct US Customs and Border Protection to collect a cash deposit based on these preliminary rates. Due to a change in practice, the department now requires importers to post cash deposits rather than bonds to cover the estimated duties for any petitions filed on or after 2 November, 2011. This means if the companies at the 26% rate are shipping $100 million worth of products, they will need to pay a $26 million cash deposit before the shipments are allowed into the US, Pickard said.

In contrast, the Chinese solar manufacturers hit by tariffs imposed by the department do not have to pay the full penalties in cash because the petition against them was filed in October 2011. Solar panel manufacturer Suntech is planning to post a bond that will require only a 10% deposit while the tariffs are preliminary.

The Commerce Department is scheduled to make its final CVD determination this August. If the department affirms its decision and the US International Trade Commission (ITC) makes a final ruling that imports of utility-scale wind towers from China materially injure, or threaten material injury to, the domestic industry, the department will issue a CVD order. If either the department or the ITC’s final determination is negative, no CVD order will be issued. The ITC is scheduled to make its final injury determinations in September 2012.

In companion antidumping (AD) petitions, the coalition has alleged that imports of utility-scale wind towers from China and Vietnam are also being unfairly dumped in the US. The department is scheduled to make its decision on that petition on 26 July. If Commerce makes an affirmative determination, preliminary AD duties will also be collected, according to Wiley Rein.

“There’s been a surge recently of imports from China and Vietnam at unfair prices,” Pickard said.
The AD duties would be additional to the CVD penalties and are generally higher, he said. “It’s not always the case, but that’s a good rule of thumb,” Pickard added.

By. Gloria Gonzalez

Source: Environmental Finance