U.S. Imposes Duties on Chinese Wind Tower Makers
A wind turbine tower at Trinity Structural Towers in Newton, Iowa. Chinese makers of towers will pay duties of up to 26 percent.
WASHINGTON — Chinese manufacturers of towers for wind turbines received unfair subsidies and must now pay duties of 13.7 to 26 percent, the Commerce Department said on Wednesday in a preliminary decision in a case brought by four American manufacturers of the towers.
The decision, the third trade case decided this year in favor of American wind and solar manufacturers, will be followed by another in the coming weeks on whether Chinese companies engaged in dumping the towers in the United States at prices below the cost of making them.
This month, the Commerce Department said China was dumping solar panels in the American market and imposed duties of 31 percent on the imports, adding to earlier duties imposed under a department ruling that China unfairly subsidized its solar manufacturers.
Some trade experts have warned that the series of rulings will increase trade tensions with China, which has already filed its own complaints about subsidies that federal and state governments give to American wind and solar companies.
As a result of the decision announced Wednesday, the Commerce Department said it would tell American customs agents to collect a cash deposit on imported towers equal to the preliminary rates. These duties would be substantial, because the towers can cost $600,000 each.
“These are large subsidy margins, and they likely will have significant impact on the market,” said Alan H. Price, a lawyer at Wiley Rein, which represented the Wind Tower Trade Coalition, the group of American manufacturers that brought the case.
American imports of Chinese towers reached $222 million last year, according to the Commerce Department. But the size of the American market is not clear for this year and next year, because the main federal subsidy program, the production tax credit, is scheduled to expire and will not apply to any projects entering service after this year. The pending expiration has already suppressed new orders, wind industry executives say.
The Commerce Department’s International Trade Administration said that CS Wind and its affiliates will be charged a 13.7 percent duty, and Titan Wind Energy and its affiliates will be charged 26 percent. All other companies will be charged a 19.9 percent duty.
The decision won praise from the United Steelworkers, which filed a broader case in September 2010 in which it accused China of unfairly subsidizing its renewable energy industries.
“We have plate mills that are idle right now as a consequence, so this is a good deal,” said Gary Hubbard, a spokesman for the union, referring to the wind tower decision. The towers are made by rolling steel plate into tubes, welding the seams and stacking the tubes on top of each other.
A spokesman at the Chinese embassy in Washington did not respond to a request for comment.
John Breckenridge, an expert in financing renewable energy projects at Good Energies Capital in New York, said that while the wind decision comes after similar rulings on solar equipment imports, the two industries are quite different. In contrast to the huge Chinese presence in the American solar industry, he said, its involvement in wind is still relatively small.
“This does not have a big impact on the business as it is today, but it is clear that the Chinese products have been banging on the door, with significantly lower costs,” he said. “It was only a matter of time before that door was going to start to open, and this could slow that down.”
The rulings on solar cells have split the American solar industry, with firms that make the equipment applauding the rulings but ones that sell and install such systems lamenting that higher costs will reduce their sales.
The American wind industry has not taken a position on the wind tower case.
American tower manufacturers have a parallel dumping case pending against Vietnamese tower makers, although they did not accuse the Vietnamese makers of receiving unfair subsidies.