U.S. tariffs on Chinese solar panels to be contested

The United States continues to implement new trade barriers; the most recent tariffs emerged on Wednesday, targeting solar panels imported from China.

The new tariff is a result of a query submitted in December 2008 by GES USA, an American solar company. The resultant inquiry sought to clarify tariffs levied on solar panels imported from China, imports which, for nearly two decades, were considered a duty-free commodity.

In early January, U.S. Customs officials reportedly informed the company that the solar panels contained electronic devices that place the panels in the electric generator import category which is subject to a 2.5% import tariff. Specifically, the ruling cited the presence of diodes on the solar panels as evidence of electric generation and hence they must be treated as an electric generator. Small solar panels already incur a 3.9% tariff. The January decision was made by a U.S. trade specialist whose rulings can be overturned.

The tariffs will be levied on imported panels that provide electricity for all uses. Additionally, tariffs will be collected dating from the beginning of 2009. The Solar Energy Industries Association estimates that the accumulated tariffs from this year may total more than US$ 70 million. This week's tariff revelation caught many industry leaders off-guard and yesterday the Solar Industries Association moved to block the tariff. The Association president, Rhone Resch, stated "... We're taking it [the tariff] very seriously and we will be responding. ... The industry is in the process of preparing a challenge". The Association intends to file their appeal with senior U.S. Customs officials who have the option to overrule the decision to implement the tariff. However, if the officials do not revoke the tariff, then the case must go before the U.S. Court of International Trade.

The U.S. amount spent on imported solar panels roughly matches the income from exported panels; US$ 605 million imported versus US$ 555 million exported, according to the Commerce Department figures on the first seven months of this year. Major solar panel importers have already begun to move their operations to the U.S.