Thursday, May 31, 2012

United States Puts Tariffs on Chinese Wind Turbine Towers

The U.S. Department of Commerce has put tariffs of between 13% and 26% on Chinese wind-turbine towers. The preliminary ruling, made in response to a complaint filed in December by a group of U.S. turbine-tower makers, found that Chinese firms enjoyed unfair government support, including grants, preferential tax treatment and cheaper prices for raw materials.

The Commerce Department announced tariffs of 13.74% on CS Wind and 26% on Titan Group companies. All other Chinese tower makers received preliminary tariffs of 19.87%. If the department affirms its preliminary findings later this summer and the U.S. International Trade Commission makes a separate determination that the subsidies are injuring U.S. companies, the tariffs could be final by October.

The Wind Tower Trade Coalition, the group of U.S. firms that filed the complaint, called the ruling "an important step in remedying the harm caused by unfairly traded wind tower exports. The tower coalition includes Broadwind Towers Inc., DMI Industries, Katana Summit LLC and Trinity Structural Towers Inc.

The outlook for the U.S. wind-energy market is uncertain because of the looming expiration of tax credits the industry needs to compete with traditional sources of electricity. American companies that make components for wind turbines are further battered by competition from Chinese and other foreign firms that have lower costs for labor and raw materials, making the massive towers cheap enough to ship around the world.

China is now the world's largest tower-manufacturing center. That has led to oversupply and falling prices for key components used in renewable-energy projects. Wind-tower manufacturers world-wide have production capacity that doubles global demand.  According to the Commerce Department, U.S. wind-farm developers imported $222 million worth of Chinese towers in 2011. Imported towers accounted for about half of the U.S. market. Chinese and Vietnamese towers together captured more than one-quarter of the U.S. market in 2011. (WSJ, 5/30/2012)

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