China slapped with stiff solar cell tariffs

The United States starts to play hardball with Chinese manufacturers with tariffs ranging from 31% to 249.96%.

According to Lux Research, the preliminary anti-dumping tariffs announced by the United States Department of Commerce are meant to "help drive" the US solar industry.

But Chinese manufacturers can simply outsource production outside China to circumvent the new tariffs while US manufacturers will have no choice but to bear the brunt of China's retaliatory tariff hikes on shipments to the mainland.

So, ultimately, it may be other Asian solar cell producers in Taiwan, Vietnam and Malaysia who will benefit from these heavy-handed tariffs, US-based ones, as intended.

"Work-arounds still exist for Chinese manufacturers that will keep them very competitive against those of plaintiffs such as Solarworld, while U.S.-based polysilicon manufacturers will likely suffer the brunt of retaliatory tariffs as they ship into China. The end result? Solar power generation will become more expensive in the U.S. right around the time when it was becoming competitive with traditional power generation sources," said Lux Research.

"While tariffs on panels from Suntech, Trina, Yingli, and LDK will be just over 31%, solar manufacturers that did not provide any documentation will experience tariffs of 249.96%. The tariffs will be retroactive by 90 days, making them applicable to panels shipped from the middle of February 2012. The scope of anti-dumping is the same as the initial countervailing duties where cells made outside of China, but assembled into modules in China, will not be subject to anti-dumping tariffs," it added.

"By moving US-bound module manufacturing outside China – Taiwan for example – Chinese module prices can likely stay in the $0.90/W to $1.10/W range, depending on the manufacturer. This is slightly upward of the prices that drove 1,860 MW of installations in 2011. A slowdown in growth no doubt follows but U.S.-based manufacturers are not the game changers, let alone the real winners. The likes of Taiwan, Vietnam and Malaysia represent the biggest beneficiaries of this policy," it said further.