Chinese media: Bonded trade is only way out of polysilicon duties

Domestic media speculate that China could allow bonded trade to fulfill its commitment to increasing U.S. polysilicon imports under the Phase 1 trade agreement despite extended duties.

Quoting an analysis from the Chinese website testpv.com, the reports say that the road to cancelling the high duties on polysilicon imports from the USA, which the Chinese Ministry of Commerce (Mofcom) extended on January 19 for another five years, “has been blocked.” According to the reports, a tariff-free import quota “is also difficult to expect.” Therefore, TestPV believes that “the only possibility is bonded processing of incoming polysilicon from the United States.”

So-called bonded or processing trade was exempt from any duties through August 2015 before Mofcom closed this loophole. Processing trade can be conducted with imported goods that are processed into products destined for export from China.

One should not overinterpret the speculative Chinese reports. They may indicate a possible route in the upcoming talks on the Phase 2 trade agreement between the U.S. and China, but can naturally say nothing about the outcome.