The US International Trade Commission (USITC) has officially voted to uphold the findings that China and Taiwan PV manufacturers have been dumping their products. The tariffs against PV imports will follow the Depart of Commerce's (DOC) decision which was released on December 2014, which stated that anti-dumping and countervailing duties (AD/CVD) will be imposed on China PV imports and anti-dumping tariffs will be imposed on Taiwan PV imports, according to findings from TrendForce.
In line with DOC's ruling in December, China PV modules will be severely punished with minimum tariff rates starting at 70% while the rates for Taiwan PV manufacturers will range from 11.45-27.55%. However, the first-tier manufacturers in China are able to use the loophole provided by the favorable review and reduction of the 2012 tariff rates earlier in January 2015. Under the revised rates of 17.5% for 2012, the vertically integrated China firms could still sell in the US with a cost advantage.
China manufacturers with the same tariff rate advantage are poised to take over because they have taken account of the former market scenario and are again increasing their export shares to the US market. JA Solar, which is known for its high performance products of excellent quality, did not enjoy the same reduction of the 2012 tariff rates. However, JA Solar's existing market share in the US is quite small compared with its large gain of market share in Japan. Hence, the trade dispute so far has little impact on its business operations.
The situation for solar cell companies in Taiwan is a lot worse in comparison. Recently, major China manufacturers have been engaging in hard bargaining when it comes to their orders for Taiwan-made cells. Already at zero gross margin, Taiwan firms will now face another round of price slashing for their products following ITC's vote. China, Europe and US PV manufacturers will still provide solar orders to Taiwan companies but the prices of mainstream Taiwanese multi-Si cells will start to fall from US$0.31/watt to record lows, pulling down the prices of Taiwanese wafers as well. Motech is included in this price projection despite having the furthest rate rollback among Taiwane firms, at 11.45%. In response to the situation, Taiwan manufacturers will opt to relocate their production lines as the quickest and most effective solution instead of devoting their efforts to develop new export markets. TrendForce expects those firms that have planned for relocation will do so immediately.
While there is a chance for tariffs returning to zero when the US government reviews the tariff rates for 2016, Taiwan solar cell makers may not be able to cope with the ruinous change brought by the newest USITC decision. TrendForce expects a few firms in the Taiwan PV industry to exit the market as they become uncompetitive. A straightforward wave of mergers is unlikely to happen because acquisitions of smaller second-tier firms do not offer any substantial benefits in the current market.
