While trade is often a bone of contention between the United States and China, this week’s visit by Chinese Vice President Xi Jinping threw the spotlight on one subset of that battle that could have far-reaching effects well in excess of the raw dollar amounts at stake.
At issue is a complaint filed by a solar industry trade group, the Coalition for American Solar Manufacturing, or CASM, asking that the US government impose tariffs on Chinese solar panels. CASM wants the duties for what it claims are unfair subsidies by China that make Chinese solar products substantially cheaper than those offered by many US competitors.
Language in President Obama’s State of the Union, along with comments made during Xi’s visit, would seem to indicate that the federal government is set to weigh in on the side of US solar energy companies in this brewing trade war, and so make a stand for domestic green energy manufacturing and good-paying American jobs.
It seems like a political slam-dunk. The president, after all, campaigned in 2008 on the promise of a growing alternative energy sector, and protecting jobs from being off-shored appears to be the perfect play at a time when unemployment is still unacceptably high. But the reality is, to put it in diplomatic speak, more nuanced.
First, that solar trade group, the Coalition for American Solar Manufacturing, claims to represent seven solar manufacturers, but the only company publicly identified as a CASM member is SolarWorld. SolarWorld is actually not a US company, but a German one, though it does employ about 1,000 at its Hillsboro, Oregon factory.
And even that number is nuanced. SolarWorld is considered the largest producer of solar panels in the US, and so it is used as a sort of case study in this trade dispute. Several stories on the topic note that SolarWorld shuttered its Camarillo, California plant, and with it went 100 jobs. The implication is that Chinese pricing caused the California closure, but a quick step through the Google looking glass will reveal that SolarWorld moved all its manufacturing to Oregon after that state offered it millions of dollars in tax breaks. Read the rest of this entry →