Are the Chinese dumping cheap solar panels into the U.S. market?

dump truck

China’s tremendous increase in solar photovoltaic production, driven in part by an estimated $42 billion in subsidized government loans between 2010 and 2012, has been a key factor in the rapid decline in solar panel prices worldwide. While these price reductions have been instrumental in the recent boom in U.S. solar installations, some U.S. solar manufacturers, as well as the U.S. Department of Commerce, make the claim that China and Taiwan have been dumping. In other words, China have been selling solar panels for less than their manufacturing costs in order to make the products of American panel manufacturers uncompetitive and drive them out of business.

Recent findings of extensive investigations by the Commerce Department and World Trade Organization (WTO) provide opposing conclusions. On one hand, Commerce determined in 2014 that China and Taiwan’s photovoltaic imports violated the antidumping duty law by selling solar products in the United States at prices far lower than market price. In their report, they found that Chinese dumping rates ranged from “26.1% and 165.04%” and Taiwanese producers ranged between “11.45% and 27.55%”. In addition, they concluded that that China violated the countervailing duty law by providing heavy subsidies to Chinese solar manufacturers. The Department calculates that China supplied solar producers with subsidies ranging “from 27.64% to 49.79%”. These findings have led to the U.S. imposing tariffs on “solar panels from China ranging from 18.56% to 35.21%”.

On the other hand, the WTO found that the U.S. violated global trade rules by imposing punitive import duties on Chinese products including solar panels. They called the imposed countervailing duties on Chinese imports “unjustifiable.”