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Solar sector shrugs off tariff action

2024-05-17 09:37:33China Daily Editor : Li Yan ECNS App Download

An employee works on the solar cell production line of a company in Huzhou, Zhejiang province. (XIE SHANGGUO/FOR CHINA DAILY)

The recent decision by the United States to impose additional tariffs on certain Chinese products, including solar cells, is unlikely to significantly affect the industries concerned in China, said experts and business insiders, noting the move is more about political posturing than economic issues.

They said the US is not a major export destination for Chinese solar products, and that China has already begun to diversify its export markets. The additional tariffs show the US is concerned about the rapid growth of the Chinese solar industry, which it sees as a potential threat to US competitiveness.

"China's PV industry has a significant advantage in technology, prices and (after-sales) service, thanks to years of large-scale development and technological iterations," said Lin Boqiang, the head of the China Institute for Studies in Energy Policy at Xiamen University.

"They are worried that China's PV industry will quickly dominate the global market, leaving little space for them.

"The purpose of the US' additional tariffs on Chinese solar products is still to suppress the industry's development. However, the direct impact of this move on China's PV industry is limited, as exports to the US are not significant. It may have a certain impact on market expectations."

Notably, the US did not feature among the top 10 export destinations for Chinese solar modules (an assembly of connected solar cells) in the past year, according to data from the China Photovoltaic Industry Association. In the first 10 months, the US market share of China's module exports was lower than that of Germany which stood at 2.6 percent, ranking tenth.

Last year, China's exports of photovoltaic cells and modules to the US amounted to $3.35 million and $13.15 million, respectively. These two major solar products accounted for just 0.1 percent and 0.03 percent of China's total export of photovoltaic products, respectively, according to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

Multiple leading solar companies in China, including three out of the top 10 global solar companies in terms of module output last year, said the US' additional tariffs are expected to have little impact on their business operations.

Liu Yiyang, deputy secretary-general of the CPIA, said: "Concerns have been heightened in Western nations given the rapid growth of China's solar industry. The advancement of China's solar industry plays a pivotal role in ensuring a stable supply of solar products to address climate change worldwide, making solar power one of the most economical power sources for the vast majority of countries and regions globally."

The remarks came after the US government decided on Tuesday to impose additional tariffs on its imports of Chinese products like electric vehicles, lithium-ion batteries and solar cells on top of existing tariffs under Section 301 of the US Trade Act of 1974. Specifically, the import tax on Chinese solar cells will rise from 25 percent to 50 percent.

"The World Trade Organization has long ruled that the US Section 301 tariffs violate WTO rules. The additional tariffs lack legal support," said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

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