Opinion: U.S. right to fight Chinese dumping – Sen. Sherrod Brown – POLITICO.com


U.S. right to fight Chinese dumping

A worker fixes a solar panel at a factory in Qingdao, east China's Shandong Province. | AP Photo

The U.S. Tax Code promotes Chinese-made solar panels, the author writes. | AP Photo

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By SEN. SHERROD BROWN | 5/24/12 9:29 PM EDT

 

In just one year, the U.S. went from having a trade surplus with China on solar cell parts to a $1.6 billion deficit. China is now making half the world’s solar panels and exporting nearly all of them.

But here’s the twist: The U.S. Energy Department now finds that production costs for U.S.-made solar panels are lower than those from China. So why is Beijing outselling us? And why are the prices cheaper?

The Obama administration determined last week that China’s state-sponsored solar industry is illegally dumping products on our markets. On May 17, the Commerce Department made a preliminary decision to levy tariffs of at least 30 percent on Chinese-made solar cells and panels. This decision, and corresponding trade enforcement actions, are critical to the future of the U.S. solar manufacturing industry.

China is cheating in the clean-energy marketplace. Its unfair solar trade practices have already led to the closing or downsizing of several U.S. manufacturing companies and the loss of thousands of well-paying U.S. jobs. If China’s violations are allowed to continue, the U.S. solar manufacturing industry — which pioneered development of solar energy cells — could disappear.

To make up for higher production costs, China has been known to provide its solar manufacturers with an array of direct export subsidies, including free or inexpensive land and free power. This is on top of a currency that is significantly undervalued, which gives them a price advantage estimated at least 20 percent more than U.S. manufacturers.

As a result, Chinese exports of solar modules into the U.S. jumped by more than 300 percent last year. From 2008 to 2011, exports of Chinese solar parts have surged an incredible 1,745 percent. China’s aggressive export subsidies have almost overnight allowed China’s solar industry to export 95 percent of its production.

To make matters worse, the U.S. Tax Code actually promotes the purchase of Chinese-made solar panels. A tax credit for the installation of solar products on homes and businesses requires that only 30 percent of the installed product be made in the United States — opening the floodgates for the purchase of Chinese-made solar panels with U.S. tax dollars.

U.S. manufacturers and workers can compete on a level playing field in the growing global clean-energy market. The worldwide solar market alone has increased more than 1,000 percent in the past five years, and it is expected to grow even more. Our workers are up to the task, and our companies are responding to the demand, especially in solar equipment and polysilicon.

Ohio, in particular, could benefit from fair solar competition. It is quickly becoming the Silicon Valley of clean-energy manufacturing. Ohio is listed among the top states for solar manufacturing capacity, according to the Solar Energy Industries Association. In northwest Ohio, businesses and universities are leading the nation in solar technology innovation, with the Toledo area having one of the highest concentrations of solar jobs in the nation. 

But these jobs will continue to be threatened if the Chinese are able to continue to game the global solar market. As one Wall Street analyst put it, companies such as First Solar are caught in a race to the bottom thanks to declining prices and oversupply brought on as the Chinese seek to unfairly grab market share in the United States and around the world. 

The U.S. government must hold China accountable for its unfair solar subsidies and dumping, and the Commerce Department’s decision is critically important to help establish a level playing field for U.S. manufacturers. It is also testing the Obama administration’s larger resolve to stand up to China’s predatory trade practices across a number of manufacturing sectors. 

In addition to Commerce Department actions, the House should pass my bill, which would very likely make China pay a price when it manipulates its currency to give its exports an unfair advantage against U.S. products. This bill, which could create more than 2.25 million jobs over the next decade, is the single biggest bipartisan jobs bill to pass the Senate last year. Yet House Speaker John Boehner (R-Ohio) has failed to bring it to a vote. 

Sen. Chuck Schumer (D-N.Y.) and I introduced legislation last week that would largely bar Chinese-made solar panels from qualifying for U.S. tax credits — requiring the tax credit be applied to products with the majority of parts made in the U.S.

Make no mistake: China’s gains in the clean-energy market are coming unfairly at the expense of U.S. manufacturers and workers. Our long-term economic health — and our place as a leader in clean-energy innovation — depends on the ability of U.S. manufacturers and workers to produce and export their quality goods. 

The United States cannot increase its energy security, create good manufacturing jobs or strengthen its economic growth by replacing Middle East oil imports with unfairly subsidized clean-energy technologies imported from China.

Opinion: U.S. right to fight Chinese dumping – Sen. Sherrod Brown – POLITICO.com.

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