Friday November 25, the Ministry of Commerce of China (MOFCOM) launched an investigation into U.S. government subsidies for renewable energy, with potential for actions through the World Trade Organization (WTO).
China's Minister of Commerce Chen Deming. Photo Credit: Bloomberg
This announcement came just days after a group of Chinese PV firms said it would file a petition to the Ministry to investigate the alleged trade violations. The group claims U.S. firms are selling polysilicon to China at below-cost prices, and that U.S. subsidies to domestic manufacturers do not comply with WTO rules.
But according to the MOFCOM statement, the inquiry is in response to a petition filed by groups representing more than just the solar PV industry. The investigation also encompasses possible U.S. subsidies to the wind and hydroelectric sectors.
“The applicants proposed that the US government’s supportive policies and subsidy measure to its domestic renewable energy industry violate WTO rules, hinder and limit the development of China’s renewable energy industry, and constitute trade barriers,” the statement said.
These actions are the latest in an escalating trade war over prices of photovoltaic products. Last month, the U.S. Department of Commerce and U.S. International Trade Commission (ITC) began their own inquiries into sales of below-cost Chinese solar cells to the U.S.
The Coalition for American Solar Manufacturing (CASM), a group of U.S. PV firms concerned about the impact of cut-price Chinese PV products, filed the petitions that instigated the inquiries.
If U.S. Commerce and the ITC find the CASM complaints to be true, then Chinese imports to the U.S. could face hefty tariffs.
Commerce must issue verdicts on the anti-dumping and anti-subsidy claims in March and May respectively. The ITC will decide whether Chinese practices harm U.S. firms by December 5.
The MOFCOM investigation will end by May 25, 2012, shortly after those in the U.S. If the Chinese investigators find U.S. practices to be in violation of WTO rules, they could retaliate by taking the case to the WTO.
