New Chinese polysilicon duties are slap in the face to trade deal
China will impose high duties on polysilicon imports for another five years. After a twelve-month final review, the Chinese Ministry of Commerce (Mofcom) announced on January 19 that the tariffs for imports from the United States and South Korea will remain the same as those introduced in 2014 or amended in 2017.
The extension of artificially high duties on U.S. polysilicon imports unmasks China’s commitment to increasing import volumes made in the Phase 1 trade agreement with the U.S. on January 15 as hollow rhetoric for the time being. Presumably, the unchanged duties are due to negotiation tactics: China does not want to hand over bargaining chips ahead of the talks about the Phase 2 trade agreement with the U.S. on tariffs.
The extended duties are valid from January 20, 2020. Thus, tariffs between 55.4% and 59.1% still apply to U.S. manufacturers while the two Korean producers OCI and Hanwha Chemical enjoy lower rates of 4.4% and 8.9%, respectively.
Mofcom argues “if the anti-dumping measures are terminated, dumping of imported solar-grade polysilicon from the United States and South Korea on China may continue or reoccur, and damage to the domestic solar-grade polysilicon industry may continue or reoccur.”
Obviously, China is not ready to make any substantial compromise on its strategy to build up a self-sufficient domestic polysilicon industry.
Update on January 20:
REC Silicon says it does “not expect this announcement from Mofcom to affect or change China’s commitment to purchase solar-grade polysilicon from the United States under the terms of the Phase 1 Trade Agreement.”
Francine Sullivan, the company’s vice president of business development, indicated that China could create a tariff-free quota for U.S. imports or reopen the loophole of processing trade.
On request of pv magazine, Johannes Bernreuter, head of Bernreuter Research, has commented on this view. You will find the text in the “Magazine Reports and Online Articles” section in our collection of PDF Articles.
- Hankook Silicon
- Hemlock Semiconductor
- REC Silicon
- South Korea
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