Trade disputes often involve the pot calling the kettle black, but shades of black matter. A ruling against Chinese solar panel manufacturers by the US International Trade Commission, which opens the way for tariffs, is one such dispute.
The solar panel industry, whose existence depends on government subsidies, is decrying their copious use when they harm rather than help its bottom line. For American consumers interested only in reducing their carbon footprint, it should not matter whether they are subsidised directly by their own government or indirectly by China’s. But it does.
Hypocrisy by US panel makers is no obstacle to seeking a remedy and the facts are damning. China’s panel manufacturing capacity has grown explosively to about 30 times domestic demand. Its panels now satisfy more than half of US demand, some $1.6bn in the first eight months of 2011, up from $1.5bn in all of 2010. This understates volume, because prices have plunged. Chinese panel makers benefit from end-user subsidies just as US manufacturers do. But in China they receive cash grants, tax advantages, export assistance, and cheap power and raw materials. Chinese companies point to subsidised loans received by some US manufacturers, such as controversial Solyndra. But China’s are many times larger.