The United States exempts 25percent of tariffs on this product and Chinese companies are the biggest winners.

 The United States exempts 25percent of tariffs on this product and Chinese companies are the biggest winners.

Once upon a time, Peng Xiaofeng of Saiwei, Jiangxi, and Shi Zhengrong of Shangde, Wuxi, were the most famous names in Chinas economy. They represent the photovoltaic industry has also carried the great hope of the nation.

Later, the world changed with time. Although the global production capacity was the first for many years, Chinas photovoltaic industry still suffered from cold winter. In addition to factors such as industrial cycles, the external pressure of the United States has also contributed a lot.

On January 22, 2018, President Trump announced that the United States would impose a 30% tariff on imports exceeding the quota for photovoltaic cells and components in the first year, and the tariff rate would decrease by 25%, 20% and 15% in the next three years. At that time, this measure severely damaged the export of photovoltaic products in China.

However, because domestic photovoltaic capacity in the United States is completely unable to meet the needs of U.S. customers, the Trump government has to submit to the strong pressure of domestic public opinion.

On June 12, local time, a document released by the Office of the United States Trade Representative showed that the Federal Trade Department ruled that double-sided solar modules would no longer be subject to Article 201. That is, double-sided solar module products exported to the United States will not have to pay another 25% tariff fee.

American media exclaimed: Double panel technology defeated Trumps tariff stick!

After the news came out, the shares of Jingke, Longji and other beneficiary Chinese companies rose. Conversely, due to strong pressure from Chinese photovoltaic companies, the shares of First Solar Inc. (FSLR.US), a domestic solar manufacturer in the United States, fell nearly 7% on Wednesday.

Chinese companies are the biggest winners

Share prices of US rivals plunged

According to officials from the U.S. Trade Representatives Office, the document will come into force after the formal federal filing process on Thursday (13), local time.

The document Product Exclusion Responsibility: Specific Products in Solar Product Safeguards states that the following products will be exempted from tariffs:

(15) Double-sided solar panels require both sides of the module to absorb light and generate electricity, and the panel module consists of only two-sided solar cells.

Photo Source: Photograph Network (Graphic and Textual Independence)

At the same time, the United States has also waived tariffs on 250W-900W flexible fiberglass solar panels, which require no other glass components and solar panels, and optical thin films with rows spacing more than 10mm.

According to Energy Trend and other industry databases, except for LG Electronics in Korea, Hanhua Group and several small suppliers in Canada, the beneficiaries of this tax exemption are almost identical to Chinese companies. Among them, Longji, Yingli and Jingke are the three leading companies in terms of market size.

Every editor noticed that the share price of Jingke Energy rose continuously on Wednesday and Thursday. As of 1:30 a.m. Beijing time on the 14th, the share price was tentatively reported at $24.44, with a cumulative increase of 8.6% this week and 39.7% in one month.

In addition, Longji shares listed in Shanghai also closed up 0.58% on the 13th. Dongfang Risheng, Xiexin, Trina Solar Energy China and other companies have also mastered and applied the solar energy technology which has been granted tax exemption.

Trina Solar expects its deployed dual solar modules to be applicable to tax exemptions. We are optimistic that this [tax exemption] will help our customers gain value from our products, Chu Diwen, president of the companys Americas region, said in an e-mail statement.

After the abolition of the tariff exemption, the prospects of the original industry-protected domestic photovoltaic enterprises in the United States were immediately underestimated. Jenny Chase, a new energy analyst, said, American companies are going back to competing with mainland China.

First Solar, a U.S. solar manufacturer, fell 6.8% on Wednesday, local time.

Double-sided solar panels are the future trend

Double-sided solar module itself is very light, and its efficiency is much higher than the traditional module, which is regarded by the industry as the only way to clean energy development in the future.

Photo Source: Photograph Network (Graphic and Textual Independence)

So even if some domestic photovoltaic companies were hit by tariff exemptions, the American Solar Energy Industry Association (SEIA) welcomed the decision. Smino, vice president of market strategy at SEIA, said

This exemption will accelerate the adoption of dual-sided solar technology in the United States, even though it is still at a relatively early stage. Now most of the worlds leading module suppliers have provided or are about to launch a two-sided product.

In the submission, the Office of the United States Trade Representative said it would monitor the development of the U.S. market and reserve the opportunity for future tariff exemptions to promote clean energy development in the United States.

Colin Smith, a senior solar analyst, said: Tariff exemptions will give double-sided technology a more competitive advantage. This will certainly reduce the overall cost and make it more attractive to developers.

Solar energy analysts are bold to predict that the tariff decision will make nearly 100% of the U.S. public energy industry in the future to double-sided solar panels, a potential market size enough to make people blush.

In addition, according to U.S. media reports, Lee Zhenguo, president of Longji Stock, said that previous unreasonable tariffs had made the price of double-sided solar products in the United States about 50% higher than that elsewhere, and that the current tariff exemption would strongly support the development of clean energy in the United States.

US 201 Survey Contains the Development of Chinas Photovoltaic Industry

This tariff exemption can be regarded as a straightening out the chaos of the 201 Survey launched by the United States against Chinas photovoltaic industry. However, in retrospect, the survey had a huge impact on Chinas photovoltaic industry objectively.

On January 22, 2018, U.S. President Trump announced a four-year global safeguard for imported photovoltaic products, based on the previous 201 Survey conducted by the United States.

The so-called 201 Survey is based on Article 201 of the 1974 Trade Law of the United States. The article stipulates that when the quantity of imports of a certain commodity surges and causes serious damage or threat to American industry, the President of the United States can restrict imports through tariffs, quotas and other measures to protect his own industry. Because of its strong unilateralism, this trade remedy tool was rarely used in the United States after the establishment of the World Trade Organization.

Bai Ming, deputy director of the International Market Research Institute of the Academy of Commerce, said at the time that compared with the previous double opposition, the initiation of the 201 Survey was not based on the existence of dumping or subsidies. It was a serious unilateralism and domestic tendencies, which emphasized thatthe United States takes precedencerather thancompetitiveness takes precedence.

Bai Ming also said, Previously, the protectionism of the United States was mainly aimed at a single country, but now it is aimed at the whole world, which will have an impact on the exports of many countries, including China.

The Chamber of Commerce for Imports and Exports of Chinas Mechanical and Electrical Products responded that many manufacturers would not be able to export solar panels from mainland China to the United States because the United States would impose a maximum of 30% on imports of solar energy products, coupled with the previous double-handed policy towards China. According to the Chamber of Commerce, Chinas solar panel exports to the United States fell 41% year-on-year in 2017.

Source: Daily Economic News Responsible Editor: Chengyu_NBJ11143