China's trade ministry said today it will investigate whether U.S. and South Korean suppliers sold solar-grade polysilicon below cost, an action that will escalate an ongoing solar trade dispute and potentially affect several U.S. suppliers.
China's Ministry of Commerce issued the decisions in two statements on its website, citing preliminary evidence from GCL Poly-Energy Holdings, LDK Solar and Daqo New Energy, Reuters reported. According to the Reuters report, Chinese officials have threatened to impose trade duties on U.S. shipments of polysilicon if the U.S. moved to penalize Chinese solar companies.
Earlier this year, the U.S. Department of Commerce issued two new import duties on solar equipment made in China. In May, the department put a minimum 31 percent, 90-day retroactive tariff on Chinese-made solar panels after concluding China has committed unfair trading practices to the detriment of U.S. manufacturers. The department imposed in March a separate tariff of up to 4.73 percent on Chinese panels after determining the government provided unfair subsidies that allowed manufacturers there to undercut foreign rivals.
The one-upmanship between China and U.S. is has affected a number of companies. Greentech Media has written about two small American solar device manufacturers that have been caught in the crosshairs of DOC's tariff ruling. Chinese solar companies also have complained about the tariffs and are taking steps to protect themselves. For example, Suntech, which has manufacturing facilities in three countries, including a U.S-based factory in Arizona, might shift some of its operations outside of China. The company has previously said it could provide its customers in the U.S. with "hundreds of megawatts" of solar products that are not subject to tariffs.
China's latest action is particularly problematic for companies like Hemlock Semiconductor Corp., a Dow Corning-owned business.
Dow Corning CEO Robert D. Hansen said the issue could impact Hemlock Semiconductor's ability to sell material to China -- its largest market -- if the Chinese government assesses duties against U.S. manufactured polysilicon. In a statement posted on the company's website, Hansen urged the U.S. and China to negotiate a settlement on global trade issues. He also said the action threatens the Chinese solar industry's access to the technical expertise and material supply that companies like Hemlock provide.