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Power China The Almighty Buck United States Politics

U.S. Imposes Tariffs On Chinese Solar Cells 345

New submitter kimtysirt sends this excerpt from a Bloomberg report about U.S. tariffs for Chinese solar panels: "The U.S. yesterday imposed tariffs of as much as 250 percent on Chinese-made solar cells to aid domestic manufacturers beset by foreign competition, though critics said the decision may end up raising prices and hurting the U.S. renewable energy industry. The U.S. Commerce Department ruled that Chinese manufacturers sold cells in the U.S. at prices below the cost of production and announced preliminary antidumping duties ranging from 31 percent to 250 percent, depending on the manufacturer. China criticized the action, saying the U.S. is hurting itself and cooperation between the world’s two largest economies. The decision is meant to provide a boost to the U.S. solar manufacturing industry, where four companies filed for bankruptcy in the past year."
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U.S. Imposes Tariffs On Chinese Solar Cells

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  • by crazyjj ( 2598719 ) * on Friday May 18, 2012 @09:32AM (#40040207)

    But only because they were already artificially low, with China selling those things below cost just to gain market dominance. Hell, even with this, they'll STILL be artificially low, with the U.S. heavily subsidizing the whole industry. The fact is that solar power is just not that economical on its own (and IMHO is a pipe dream anyway, but that's another post). But seeing as the U.S. still subsidizes the wildly profitable coal and oil industries (and don't get me started on agricultural subsidies), I guess turnabout is fair play.

    And before anyone jumps up to defend the free market here, you may want to keep in mind that a level playing field (with no protectionism) is great if you're a Chinese worker making $1 an hour--not so fucking great if you're an American or European worker getting paid many times that. You go ahead and compete in the "free market" with people willing to work for a fraction of your salary and just see what happens to your beloved first-world living standard.

  • Translation (Score:5, Insightful)

    by Compaqt ( 1758360 ) on Friday May 18, 2012 @09:38AM (#40040261) Homepage

    When US subsidize solar, it good [google.com].

    When China subsidize solar, it bad.

  • by dintech ( 998802 ) on Friday May 18, 2012 @09:42AM (#40040287)

    Devil's advocate: Maybe they should take it further and tax all products to the equivalent of government subsidies by foreign entities. Heavily subsiding is a practice that should be discouraged, irrespective of the product. While they're at it, they can stop local subsiding of things like high fructose corn syrup too.

  • by h4rr4r ( 612664 ) on Friday May 18, 2012 @09:42AM (#40040289)

    How would they run out of money? The government of China has and can force its banks to give loans that essentially never have to be repaid to these vendors.

  • by LordNicholas ( 2174126 ) on Friday May 18, 2012 @09:42AM (#40040293)

    As always seems to happen during debates around trade tariffs and regulation, you're considering only one side of the equation (American workers) and not the other (American consumers). The majority of us who are not workers manufacturing solar cells benefit greatly from having a supply of cheap, foreign-made solar cells rather than expensive, domestic-made cells, which on the whole balances out the negative impact on American workers.

    Our first world living standard is exactly because of these kinds of arrangements, not despite them.

    You are correct in pointing out that "dumping" (selling solar cells below the cost of manufacturing them) is a true market distortion and should generally be discouraged, but I think it's naive to pretend that these tariffs are based on economics and not political pressures.

  • by jeffmeden ( 135043 ) on Friday May 18, 2012 @09:45AM (#40040317) Homepage Journal

    And before anyone jumps up to defend the free market here, you may want to keep in mind that a level playing field (with no protectionism) is great if you're a Chinese worker making $1 an hour--not so fucking great if you're an American or European worker getting paid many times that. You go ahead and compete in the "free market" with people willing to work for a fraction of your salary and just see what happens to your beloved first-world living standard.

    I would hope that anyone commenting here realizes that when it comes to China, "free market" is not even on the spectrum of economic principles. Currency manipulation that puts EVERYTHING in the world's second largest economy at a continuously under-priced advantage is about as close to the "free market" as North Korea is to joining the UN.

  • by SaroDarksbane ( 1784314 ) on Friday May 18, 2012 @09:46AM (#40040319)

    You go ahead and compete in the "free market" with people willing to work for a fraction of your salary and just see what happens to your beloved first-world living standard.

    You're failing to make a comparison between what is seen (lost US jobs) and what is unseen (improved standard of living for everyone in the country because of cheaper energy-related goods). You're angry that other people might out-compete you in the job market, so in essence you want the government to use force to make sure that solar energy is kept more expensive so that all the other citizens in the country will subsidize your job.

    That's kind of a jerk thing to do, FYI.

  • by Anonymous Coward on Friday May 18, 2012 @09:48AM (#40040341)

    Once they've driven the competition out of business, they probably won't continue to sell them at a loss.....

  • Hyopcrisy (Score:5, Insightful)

    by DaMattster ( 977781 ) on Friday May 18, 2012 @09:50AM (#40040355)
    China engages in all kinds of economic protectionism including artificially manipulating its currency not to mention import tariffs. So, by leveling these accusations at the United States, they sound awfully stale and hollow.
  • by h4rr4r ( 612664 ) on Friday May 18, 2012 @09:50AM (#40040357)

    So manipulating your currency and selling products at a loss is out competing?

    Are you misinformed or insane? The reason the GP quoted free market, is because when dealing with China there is never a free market, they don't play fair with their currency to being with.

  • by eldavojohn ( 898314 ) * <(eldavojohn) (at) (gmail.com)> on Friday May 18, 2012 @09:56AM (#40040417) Journal

    But only because they were already artificially low, with China selling those things below cost just to gain market dominance.

    I've heard that said a few times but it seems nuts that China would sell these things at a loss, if that's really the case they will run out of money and be forced to stop fairly soon.

    That's not necessarily true. They could be exploiting a resource. In this case, I will argue that China is exploiting their local environment [nytimes.com] and exporting products that are a direct result of using up that resource to countries that will not sacrifice that resource for money. Imagine if a solar plant in the United States could dump the tailings and cuttings anywhere they wanted or lay a pipe to anywhere that disposes of water and fluids used in the mechanical processing of said solar cells, they too could sell really cheap solar cells and panels. Lead, mercury, cadmium and the production of carbon dioxide are all still a part of fabricating photovoltaic technologies for mass production.

    The very weak argument of how a free market is supposed to protect the environment goes something like this: people know pollution is bad and therefore they pay top dollar for the companies that pollute the least. If people don't think pollution is bad, then they buy the cheapest stuff and deal with it. And somehow the free market is supposed to work like this. Well, I'm glad for the EPA and I'm glad that the free market hasn't been left to companies that would rather spend money on misinformation campaigns than actual cleaner technology. Nixon opened trade with China and every president since has left it that way. As a result, we've found a loophole to get our cheap shit without polluting our local environment. But with CO2 having global impact, it's about time we started taxing products from foreign countries that don't want to play by our standards of environmental ethics (and it's obvious that China's national government is either helpless or corrupt). It's funny, if we applied tariffs in IT the same way, all the people complaining about outsourcing would be satisfied as now the ethical treatment and compensation of workers would be artificially raised by the US government to make it a toss up whether or not it is exported. Indian programmers are exploited by their companies in ways that American companies simply cannot.

    Keep in mind, I'm not arguing for these tariffs, I'm just urging you to shift your point of view instead of assuming that the only thing the Chinese are losing in this proposition is a net loss on their sales. On the contrary, they're losing their environment and abusing human resources so much so that they are making a killing by their standards in profit. As such, it shall continue ad infinitum.

  • by Myopic ( 18616 ) * on Friday May 18, 2012 @09:57AM (#40040429)

    Misinformed, not insane. Most of these free-market types are purposely self-deluded, although a small number are genuinely dumb. They're not stupid per se, it's rather that they ignore most of reality in order to focus on a tiny sliver of reality which, when misconstrued to extreme lengths, results in Libertariansim.

    Let me be clear that this post is flamebait, not trolling. Trolling is when you say things that aren't true; flamebait is when you say things that aren't popular.

  • by Myopic ( 18616 ) * on Friday May 18, 2012 @10:00AM (#40040457)

    Would you really want a free market if you could have one? A free market is a market with zero regulations or taxes. Zero. Do you really want zero regulations? You can't even think of one single regulation you favor? If you can think of even one single regulation or tax that you favor, then what you want is not a free market, but a regulated market. Unfortunately, that then requires you to do the hard work of applying reason and subtle thought to the question of which regulations you favor, denying the opportunity to simply dismiss all regulations out of hand.

    Markets are good. Free markets are bad.

  • by unimacs ( 597299 ) on Friday May 18, 2012 @10:04AM (#40040513)
    When there's no serious competition, market rate will be higher. If someone does try to come in to compete, the big manufacturers lower the price again until the fledgling competitor, whose pockets are not nearly as deep, drops out.

    You see this all the time.
  • by peppepz ( 1311345 ) on Friday May 18, 2012 @10:06AM (#40040535)
    Yes, there are huge barriers to manufacturing something better and at a lower price than a monopolist who can count on a huge economy of scale. Cf. Microsoft vs the rest of the world.
  • by Myopic ( 18616 ) * on Friday May 18, 2012 @10:08AM (#40040547)

    What you just said is tantamount to saying that in 1969, the "price" of a trip to the moon finally reached a price where the mainstream could realistically afford a ticket, because astronauts didn't pay for the ride.

    If a government pays a price for something, then that nullifies the claim that the thing has become affordable. China is paying for your solar cells. Now, it might be either good or bad for China to be paying for your solar cells, but let's not pretend that the solar cells are actually cheap.

  • by Anonymous Coward on Friday May 18, 2012 @10:13AM (#40040595)
    Do you think it is inexpensive to setup a solar panel manufacturing plant? marketing and sales? back office support? distribution arrangements? you don't think this is terribly time consuming and expensive? all while knowing that at any minute the chinese could yank the rug out from under you and start selling the panels below cost? who would even invest in your operation knowing that reality?
  • by hrvatska ( 790627 ) on Friday May 18, 2012 @10:15AM (#40040621)
    Becoming a PV manufacturer isn't cheap. What new competitor wants to enter a market where they know their main competitor can lower prices at will below the cost of production, and sustain that reduction long enough to drive most other companies out of business? So long as that uncertainty is hanging there it will severely restrict who is willing to enter the market.
  • by h4rr4r ( 612664 ) on Friday May 18, 2012 @10:20AM (#40040677)

    How much do you think it costs to setup a PV Fab?
    Do you think anyone would give you that loan when these folks will just start dumping again until you are gone?

  • by doston ( 2372830 ) on Friday May 18, 2012 @10:43AM (#40040983)
    If the US was really interested in protecting an American industry, they could have chosen any number of industries that have been destroyed by foreign competition. Rather than protecting small solar companies, they're protecting dirty US energy companies. "Critics (people who understand the industry) say the decision may end up raising prices and hurting the U.S. renewable energy industry." Yeah, a small price to pay to keep your donors in the oil, natural gas and coal industries happy.
  • by K. S. Kyosuke ( 729550 ) on Friday May 18, 2012 @10:44AM (#40041007)

    Step 1: Set up huge industry with government captial
    Step 2: Start selling goods in foreign markets at well below what it cost to make them
    Step 3: Watch as foreign competitors go bankrupt

    Right, because the the US government capital absolutely, definitely has to be spent on military campaigns and equipment and on bailing banks out etc. and no money at all is available for the kind of R&D that the obscenely rich Chinese can afford to spend on.

  • by cdrguru ( 88047 ) on Friday May 18, 2012 @10:44AM (#40041011) Homepage

    This sounds pretty good on the surface - the US government finally doing something that might positively effect the economy and workers.

    Unfortunately, there is this thing the US belongs to called the WTO. And China is also a member. So, China will complain to the WTO which is all about free, tariff-free trade. WTO will come back with instructions to the US that these tariffs must be removed ... or else. The "or else" part is pretty much that China will introduce their own tariffs on the few US goods imported into China - but also that other countries will be enabled to also tariff US produced goods far in excess of what they are already.

    So the tariff will be removed in a couple of months at most. We all signed on to the WTO and it is an organization that is clearly focused on a race to the bottom. All manufacturing will be in third-world countries with low, low, low labor and production costs. And the sooner the US population understands that the better.

    We have seen the total number of skilled workers employed in the US drop in the last five years or so but it has been on the decline for some time now. Everyone is waiting for the government to "do something" to bring back skilled worker jobs so the middle class can recover and once again spend money on US-produced goods and services. Well, it isn't happening. Companies that employed 10 people doing a particular job have found they can get the job done with four people now. Between just pushing those four people harder and a lessening of demand, four are all that is needed. The other six jobs aren't coming back, not in any realistic time frame. We are looking at what the government says is 8% unemployment but in reality it is more like 30% - when you count the people that are working part-time as Walmart greeters becase there is nothing else. The government cannot force companies to hire back the workers they shed because they simply are not needed. The government cannot create new companies to employ people, unless you really want the WPA and CCC.

  • by GodfatherofSoul ( 174979 ) on Friday May 18, 2012 @10:45AM (#40041025)

    You're not considering history and what we should already know. When you've allowed polluting, authoritarian, near-slave driving industries in some other country to drive your industries (with human, worker, and environmental safeguards in place) out of business, what are you left with? Either no industry, or you now have to abandon human, worker, and environmental safeguards to compete. We don't want to play that game.

  • by Myopic ( 18616 ) * on Friday May 18, 2012 @11:18AM (#40041433)

    A free market is a market with zero regulation and zero taxes, but almost everyone who promotes "free markets" doesn't mean it that way -- including you. They mean they want an open, transparent, competitive marketplace. That's nice and all, but it's not the definition of a free market, and more to the point it's not the definition used by the people who are actually implementing policy. There is an incredibly tiny minority of ultra-rich industrialist ideologues who are trying to achieve REAL free markets, with zero regulations, and they are using as patsies, as fools, people like you, who bite on the mantra of a "free" market, without understanding what a free market is. If you don't want zero regulations, which it sounds like you don't, then let me be clear: you are being used unwittingly to promote a policy with which you do not agree.

  • by chrb ( 1083577 ) on Friday May 18, 2012 @12:35PM (#40042455)

    There is a basic assumption here that China is subsidising the cost of domestic solar production in order to force non-Chinese producers into bankruptcy, and therefore monopolise the future market.

    But that is just an assumption; there is another hypothesis - that the Chinese government is subsidising the cost of solar to stimulate R&D and investment in an important sustainable energy source - exactly the same reasons given by governments elsewhere. Forcing the U.S. solar manufacturing industry to collapse wasn't the goal, it was just a side effect of Chinese manufacturers being more successful than U.S. manufacturers.

    The basic allegation is that Chinese manufacturers get "unfair" government support in the form of low-cost access to land, bank loans, research grants and tax breaks. Do other countries not also do this? One of the Chinese manufacturers has already pointed out that China’s subsidies are lower than those in Germany. And is this even wrong? The U.S. subsidises oil and gas by almost $5 billion a year [bnet.com] (and that doesn't include the cost of the U.S. military), nuclear is subsidised by $3.5 billion a year, solar at $1.3 billion. And yet, when China subsidises its energy production, suddenly such subsidies are "unfair".

    China's solar subsidies are estimated at $34 billion. It sounds like a lot, but put it in context: China currently produces 2GW by solar, but has a domestic solar power goal of 15GW by 2015, and 50 GW by 2020. Within 8 years, China has to manufacture 25 times more panels than it ever has, expanding its solar capacity to the equivalent of 50 nuclear power plants. Of course, for this to be achievable they need to significantly ramp up panel production, which requires them to heavily invest (i.e. subsidise) their industry. It is very shortsighted to assume that China is building a solar industry in order to dominate and destroy Western manufacturers, when in fact they have some of the most ambitious domestic targets in the world.

  • by poity ( 465672 ) on Friday May 18, 2012 @02:43PM (#40044317)

    In response to your 3rd paragraph, the issue is not that China is wrong to subsidize, but that the US is not wrong in adding tariffs onto Chinese made panels. Subsidies are not inherently wrong, neither are tariffs that offset them. Look at the price of foreign cars in China, a mid-sized Buick is priced at over 50% more than a similar model bought in the US. These Buicks are made in China too, so shipping cost isn't the issue.

    Your final paragraph is interesting since I've addressed the issue before: if the goal is to help domestic solar production and adoption, then there is no need to subsidize export panels, the government only needs to subsidize domestic consumption. [slashdot.org] That this is not the case, points to a deep flaw in your premise.

  • by plover ( 150551 ) * on Friday May 18, 2012 @02:43PM (#40044333) Homepage Journal

    This isn't a "pro-American-jobs" move. It's an "anti-Chinese-monopoly" move. It just happens to have a component that resonates with a certain political demographic that likest to rally around "rah rah American-jobs!"

    Setting up a silicon foundry to make the panels is a big investment. If Chinese firms dump cheap solar panels on America, driving American companies out of business, and then because they've cornered the market, they'll raise their prices high and keep them there, right? You seem to think that someone will come along and try making that investment again because prices are too high, but they won't. If there's no protection today against the monopolistic practices, why would I dump $10 million into a fab plant tomorrow, knowing full well that the Chinese will just drop their prices again and run me out of business?

    Given that we have to play by anti-monopoly, emission-controlled, and pro-labor laws here, our market also can't support competition with external monopolies, uncontrolled polluters, and unregulated labor. Since we can't regulate their external business practices directly, the only tool we can effectively wield is to penalize the unfair imports.

    What really has to happen to have an effect is for the tariffs to be tied to the specific behaviors we value. If we say "polluting is worth 150% of your cost of goods, underpaid, overworked labor is worth 100%, and monopolistic dumping is worth 50%", then they could choose to avoid the tariffs associated with pollution first. If we just say "Shen-zhen plant, we charge you tariffs of 200% because you're Chinese" they have no incentive to change behavior, they'll just to go try their dumping tricks on other countries.

    Will any of this make solar panels affordable here (regardless of who makes them)? That depends on the non-solar energy markets. For comparison, look at the lighting market. Right now, high efficiency lighting isn't cost effective because electricity is cheap. Double the price of electricity, though, and the most cost effective lighting changes from incandescent to CFL. Double it again, and the most cost effective lighting is LED. The same is true with solar - as long as electricity is cheap, solar isn't cost effective. Raise the rates of electricity, and the balance will shift. Implement the smart grid, and suddenly solar panels will be the next big thing as customers discover that their A/C is costing them $50/per day using peak generating capacity. Or maybe solar will be effective only in the southern states, where A/C costs are the bulk of electricity usage, and the sunlight produces enough energy year round to make the panels worth it. They may never be effective in the northern states, where even the most efficient panels simply don't get enough sunlight to recoup their cost.

  • by jeffmeden ( 135043 ) on Friday May 18, 2012 @03:03PM (#40044641) Homepage Journal

    So, sure a US company could be founded in 10 years to compete with the Chinese, but they would be 10 years behind them in the quality and/or efficiency of their product.

    BINGO. We aren't making wooden toys, or sunglasses; we are making technology-dependent, highly precise materials and assemblies that rely heavily on a very tightly controlled process and EXACT design specifications. Design specs that can't be downloaded from wikipedia. Processes that can't be started up in a few weeks (or probably years). This is a RACE. Putting a year or five or ten on your competition can mean EVERYTHING. Just ask Apple. Why do you think it is that they are selling 142 billion of product a year? They are 2 to 3 years (used to be more like 5) ahead of their competition, and that gap is VERY hard to close when it comes to technology.

    Ask anyone working with manufacturing in China, and they will have stories to tell about how god awful hard it is to get something made the American way over there. Tolerances on locally made machines are crap. Training for employees is worthless (they leave as soon as you teach them something valuable.) Processes that get started, get dropped as soon as your flight back to the US is off the ground. It's hard as hell to change the course of manufacturing in a country. The thing is, they realize all of this. They are working around the clock to figure out how to out-do the US, and this is just another gun in their arsenal. The same is exactly true for what goes on in the US in any given industry.

    China is doing what we did back in the 30s and 40s, stumbling their way through different techniques, technologies, and methodologies to find their way to effective manufacturing while they grow the workforce needed to actually maintain it. If they give their solar industry 10 years to perfect itself (largely based on workers trained by US companies, like I mentioned earlier) and they can keep the US solar industry from blossoming (which they have done pretty well considering how many US firms have gone bankrupt) then they will be in a leadership position, with the US a distant second. Do you really want to work for $1.50 a day?

"This is lemma 1.1. We start a new chapter so the numbers all go back to one." -- Prof. Seager, C&O 351