Biden Expands Trade War to Solar Panels Where China Is Massively Dominant
Democrats removing the Chinese from the supply chain to make subsidies more politically palpable and even more profitable for their sponsors
China’s government on Friday criticized U.S. curbs on imports of solar panel materials that might be made with forced labor as an attack on its development and said Beijing will protect Chinese companies, but gave no details of possible retaliation.
The U.S. customs agency said Thursday it will block imports of polysilicon from Hoshine Silicon Industry Co., which might use forced labor as part of a Beijing campaign against ethnic minorities in the Xinjiang region in the northwest. Imports from six other Chinese suppliers of raw materials and components for solar panels also are to be restricted.
Washington is using “human rights as a disguise” to “suppress the industrial development of Xinjiang,” said a Foreign Ministry spokesperson, Zhao Lijian.
“The United States doesn’t care at all about the Xinjiang people,” Zhao said. “Their real plots and sinister intentions are to mess up Xinjiang to contain China.”
Chinese officials reject accusations of forced labor and other abuses against predominantly Muslim groups in Xinjiang. They say detention camps in which as many as 1 million people are held are for job training and to combat radicalism. [What nonsense. 1 million would be nearly 1 in 10 Uighurs in Xinjiang.]
The U.S. move is a potential hurdle for President Joe Biden’s ambition to promote solar power. Hoshine is one of the biggest global suppliers of polysilicon, a material used to make solar panels.
Zhao said Beijing will “take all necessary measures” to protect its companies but gave no details. Chinese spokespeople have made similar comments in response to earlier U.S. trade sanctions, usually followed by no official action.
The U.S. customs agency said an investigation found evidence that workers in the Xinjiang polysilicon industry were intimidated and threatened and their movement restricted.
Direct imports from Hoshine into the United States over the past 2 1/2 years totaled about $6 million while finished goods that include material from the company were about $150 million, according to the U.S. government.
Source: Associated Press
Mulling the ban on products of solar industries from China has not come out of the blue. US companies have been working hard to ambush Chinese enterprises and recently they choose to use the excuse of “forced labor.”
In a statement released on May 14, the Solar Energy Industries Association (SEIA), a US trade group, strongly urged companies to use a traceability protocol so they know the origin of the materials they are using and can take the necessary steps to move supply chains out of Xinjiang.
Chinese solar industry observers pointed out that any impacted US company which supposedly lost their edge to Chinese competitors may have become a supporter of the US ban which is being considered by the Biden administration.
Ignoring that Xinjiang polysilicon producer Xinjiang Daqo opened its plant’s door to the West to showcase its automated production, some US politicians, media outlets and trade groups have promoted increased crackdowns on the region’s solar sector – an industry in which US companies had an edge before China decided to develop its domestic PV sector.
But the past decade witnessed how the US solar industry went downhill while growth in China’s solar energy sector forged ahead.
Since 2004, Chinese PV enterprises have succeeded in lowering the costs of solar modules from around 30 yuan to 2.5 yuan per watt.
According to the China Photovoltaic Industry Association, the country’s PV supply could make tremendous contributions to the world’s renewable energy transformation. China has 67 percent of the world’s silicon raw material, 97 percent of wafers, 79 percent of solar cells and 71 precent of PV modules.
Take polysilicon, the raw material used in most solar panels. According to the latest ranking from German research firm Bernreuter Research, seven of the world’s 10 largest polysilicon producers are based in China and only one is American.
Hemlock Semiconductor Group, the only US polysilicon producer named on the list, laid off about 400 workers in Tennessee and Michigan in 2013. The trade frictions between China and the US resulted in little gains for the company, as Chinese customers cannot afford the US tariffs, Phil Dembowski, the Michigan company’s chief commercial officer, told the Wall Street Journal in October, 2020.
Lack of policy support and Trump’s tariffs strategy have hurt the US solar sector badly. According to the SEIA in 2019, tariffs on imported solar cells and modules brought about the loss of more than 62,000 US jobs and $19 billion in new private sector investment.
In addition to the economic pains, US tariffs on solar products have led to the cancelation of 10.5 gigawatts (GW) of solar installations, enough to power 1.8 million homes and reduce 26 million metric tons of carbon emissions, the group noted.
After suffering from the huge losses, the US trade group, starting from 2020, targeted China’s Xinjiang region, which contributes about 45 percent of the global polysilicon production.
However, from a practical perspective, the competitive prices of the Chinese solar panels as well as its strong industrial support ability would facilitate China to maintain its dominance in the global solar sector, and US PV manufacturers know this, a Chinese industry observer who asked to remain anonymous told the Global Times on Tuesday.
“Within one to two years, it will not be possible for the US to develop complete and mature industrial chains by itself,” the observer said.
After constant lobbying by enterprises, US politicians are busy piling on the rhetoric against China’s solar industries, although with divergences on the development of renewable energy development in the US, Democrats and Republicans have reached consensus on containing China in this field, Zhu Ying, deputy director of the National Human Rights Education and Training Base of Southwest University of Political Science and Law, told the Global Times on Tuesday.
Compared with Republicans who have been long lobbied by traditional energy firms, Democrats are keen to promote solar and wind energy not only for the electoral politics but also for the interests of high-tech companies behind them.
The draft of the Democratic Party’s 2020 platform, made public in July 2020, outlined a build-out of wind and solar energy that would far outpace current projections, calling for the installation of 500 million solar panels in the next five years alongside 60,000 new wind turbines.
“Unlike cotton-related industries, in which many Chinese companies are in the downstream of the industrial chain, China’s solar industries have taken the top position of the global chain – this is especially unbearable for the Democrats who are advocating a new climate economy and carbon neutrality and are working so hard to be the bellwether of the field globally,” Zhu said.
Democrats on the House Ways and Means Committee called on the Biden administration last week to block imports of Chinese solar panels and other products that contain polysilicon made in Xinjiang, according to the South China Morning Post.
Michigan Democrat Dan Kildee is one of the lawmakers pushing Biden to act, according to the POLITICO report. The state he represents is home to Hemlock Semiconductor.
Although the Republicans’ motives in sanctioning China’s solar industries may be to trigger Chinese countermeasures which would limit exports of polysilicon materials to the US, thus possibly hindering the expansion of new energy companies in the US, they are not willing to see quick development of China’s solar sector, said industry insiders.
“It has become a bipartisan move in the US to attack China’s solar industry. By using the lame excuse of ‘forced labor’ in the technology-intensive industry, the US not only wants to destroy Chinese companies’ reputation but also grasp the dominant narrative,” Zhu said.
“Cotton, the solar sector and the hyping of forced labor or genocide… nothing is about human rights or the concerns of Uygurs in China’s Xinjiang. The US only cares about its own interests and geopolitics,” said Zhu, noting that the US sanctions are actually strangling the right of the Uygurs to development.
The Global Times learned that more than 200 Uygurs from China’s Xinjiang have been sacked as their companies, which have business ties with the US, want to avoid possible risks or sanctions from the US. Companies and individuals that have been affected by the “forced labor” hype and the ensuing US sanctions, including labor services companies, are preparing to sue individuals and think tanks that made and spread rumors and fake news.