Chinese solar firms like Suntech Power (NYSE:STP) and Trina Solar (NYSE:TSL) can breathe a sigh of relief, temporarily at least, as the U.S. Commerce Department delayed its preliminary determination regarding possible anti-dumping tariffs on Chinese solar imports.  The department delayed the decision on imposing anti-dumping duties on Chinese solar panels from March 27th to May 17th. The decision was originally scheduled for Jan 12th before being pushed due to difficulties in determining the countervailing duties to be imposed.
A group of American solar panel manufacturers had approached the Commerce Department seeking protection from the unfair support enjoyed by Chinese panel manufacturers. We have a $4.43 price estimate for Suntech Power, which is at a 55% premium to its current market price.
The U.S. Commerce Department is seeking to impose countervailing duties on Chinese solar imports to after the International Trade Commission declared that the local American industry was being harmed by low priced Chinese imports back in December.  American companies accuse the Chinese government of aiding local solar manufacturers by providing cheap loans and undervaluing the currency. Chinese manufacturers have denied these allegations, but are taking steps to counter the effects of possible tariffs. Trina Solar set aside $3.3 million for its shipments to the U.S. in the month of December, assuming an 8% retroactive tariff. The company has also revealed plans to shift some production outside China to counteract future tariffs.
The Commerce Department has said that its investigation into the subsidies provided by the Chinese government has been ‘highly complicated’.  An import tariff on panels can reduce the price advantage enjoyed by Suntech and other Chinese solar players in the U.S. market impacting sales volumes. The U.S. market is becoming increasingly important for panel manufacturers, and the imposition of a tariff may result in lower volumes for Suntech and other Chinese firms.
- Suntech, Trina May be Hit As U.S. Trade Panel Looks Into Import Tariffs (trefis.com)
- Trina Solar: Price Estimate Revised Below $10 on Disappointing Margins (trefis.com)
- First Solar Could Get Boost if U.S. Imposes Tariffs on Chinese Firms (trefis.com)
- U.S. Delays Dumping Decision on China Solar Cells, Official Says, Bloomberg [↩] [↩] [↩]