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|Articles - Jan/Feb 2012|
|Thursday, January 19, 2012|
Page 2 of 2
Indeed, China’s push for a place in the U.S. solar market has been aggressive. And during its ramp-up, seven U.S.-based solar companies have closed or downsized over the 18 months that prices fell, with layoffs at five others. Those include some of the nation’s biggest players. BP Solar cited the global market when laying off 320 in Frederick, Md., in March 2010 and moving manufacturing to China and India. Evergreen Solar blamed China for its plant shutdown and layoff of 800 in Devens, Mass., before also sending manufacturing overseas. SolarWorld’s Ben Santarris, who is coordinating the company’s trade case, says SolarWorld closed its commercial hub in Camarillo, Calif., in September, laying off 186 workers. Santarris says American-based solar manufacturers can compete with Chinese companies on price, and possibly have an advantage: China’s low-wage workforce doesn’t compensate for the cost of importing raw materials and shipping products back to the U.S.
The coalition’s push for government intervention, called the Coalition for American Solar Manufacturing or CASM, is an attempt to save the solar industry in the United States, Santarris says, with benefits for Oregon and beyond.
“If we don’t prevail in the filing, then much, if not all, of the Western operators will go out of business,” says Santarris. “I don’t see how anybody could make a case that this is good for the marketplace, energy security, for the environment, or the economy long term.”
Oregon Sens. Jeff Merkley and Ron Wyden supported the coalition’s petitions, and the Department of Commerce could place tariffs on Chinese solar imports as early as March. The senators say the move is in part an attempt to bolster a renewable energy future for the United States. They also say maintaining solar is critical to the Oregon economy.
Merkley, who pressed the World Trade Organization for more oversight of China’s trade practices last fall, doesn’t want the Oregon solar industry to become another casualty of unfair trade, like Oregon’s paper mills, driven out of business in part by Chinese demand for recycled paper. In the steel industry, American manufacturers have made claims that echo those in solar: The Chinese government subsidizes its now massive steel industry and makes it difficult to compete.
But the irony of a German company fighting for free trade in the United States isn’t lost on some, who fear potential for fallout in the form of rising prices or increased tariffs in the trade world.
That criticism is voiced even within the solar industry, where U.S.-based manufacturers reliant on Chinese components have formed their own coalition to push back against CASM, called the Coalition for Affordable Solar Energy (CASE). They argue cheaper products make for faster solar adaptation by consumers and a more robust market. On Dec. 20, the coalition sent a letter formally asking CASM to stand down. Players in Oregon’s solar industry are also divided.
For companies selling into the Chinese market, the mantra is: “A trade war that starts setting up tariffs and all the rest of it will cut into our sales and our opportunities in China,” says Norm Eder, executive director of Oregon’s Manufacturing 21 Coalition, which advocates for industry. From their perspective, “they sure as heck don’t want to have a trade war,” says Eder, even as companies who compete directly with China cheer CASM’s efforts and scrutiny into Chinese subsidies.
While some of Oregon’s larger export industries look on, those in lumber and logs, forest products, wheat and potatoes say they aren’t worried yet, and aren’t sure they should be.
The potential for backlash, however, is not a small concern for the likes of Horowitz, who notes that while much of Oregon’s GDP comes from exports — the vast majority from computer, electronic and agricultural products — unintended consequences lurk.
“Nobody knows what the other side might do in retaliation,” he says.
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