U.S solar panel producers backed by Obama in battle with China

President Obama is set to support the U.S solar panel producers in their battle against their Chinese competitors. A group of seven U.S manufacturers are set to ask for an import duty hike up to 100 percent on solar panels made in Chinese soil. It is said that the Chinese government is subsiding the costs for these panels to be “dumped” in the American market.

The case was filed last year and matter has now reached tipping point. The move will set the sparks flying in the already uneasy relation between the two countries. America hasn’t taken kind to Beijing’s currency policies, while on the other hand China has been sour over duties imposed over many goods imported from China.

Suntech Power Holdings Co, Trina Solar, and JA Solar Holdings, three of China’s major players in the solar panel manufacturing industry account for more than 20 percent of the annual sales in U.S. America is the second biggest market for these companies after Europe. In a move to escape some of the additional burden of import duties, these manufacturers have started shifting base to the middle-east.

President Obama’s support in the issue has been a shot in the arm for U.S manufacturers. “I don’t want to see wind turbines and solar panels and high-tech batteries made in other countries by other workers. I want to make them here,” he said

The U.S. Commerce Department will make the final call as they meet today to decide the countervailing or anti-subsidy duties, while the preliminary anti-dumping duties will be decided in May. A final agreement will be reached by the third or the fourth quarter.

U.S companies have constantly complained about the Chinese Government subsiding costs of manufacturing. It is reported that the sops include below-market loans from China’s state-owned banks and subsidized raw materials, such as polysilicon.

Another counter argument is that the move will affect the U.S solar industry for the worse. “The resulting uptick in pricing might be temporary good news for module vendors who have struggled to compete with Chinese firms, but we think the most substantive result is more likely to be lower U.S. demand,” Bank of America Merrill Lynch analyst Joe Osha said in recent note to investors.

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