The Commerce Department made a preliminary decision Wednesday to impose new tariffs on imports of wind energy towers from China, the latest volley in an escalating trade war between the two superpowers over expanding green technology markets.
The move by Commerce also reflects a show of strength by the Obama administration against China at a time when presumptive GOP presidential nominee Mitt Romney has criticized the administration for going soft.
Commerce’s International Trade Administration — responding to a petition from U.S. wind tower manufacturers — said a group of Chinese producers and exporters has received production subsidies ranging from roughly 14 to 26 percent that warrant new U.S. tariffs of the same extent.
The preliminary subsidy determination covers utility-scale steel towers that support wind turbines with electric power generation capacity greater than 100 kilowatts.
“As a result of the preliminary affirmative determination, Commerce will instruct U.S. Customs and Border Protection (CBP) to collect a cash deposit based on these preliminary rates,” Commerce said in a summary of the decision to impose preliminary tariffs.
Commerce plans to make a final decision in August. The United States imported an estimated $222 million worth of the wind towers from China last year, according to Commerce.
The decision, and more broadly the success of U.S. green energy companies, is shot through with political ramifications for President Obama, who is emphasizing on the stump that the United States should not cede growing renewable energy markets to China, which aggressively supports its domestic industry.
Romney's campaign has hammered Obama over the failed loan to the Solyndra solar firm, and on China policy Romney slammed the Treasury Department last week for a report that found China was not manipulating its currency to secure a trade advantage.
Romney has promised that on his first day in office, he would issue a finding that China is manipulating its currency.
The U.S. industry coalition that petitioned Commerce over the wind towers comprises Broadwind Towers Inc., DMI Industries, Katana Summit LLC and Trinity Structural Towers Inc.
The decision is the latest step in a trade battle over renewable energy goods. Commerce announced a separate decision May 17 to impose new tariffs on crystalline silicon photovoltaic cells from China.
But China is alleging unfair U.S. practices. China last week alleged that five U.S. states have renewable energy subsidies that violate free-trade rules, Bloomberg reported.
China also filed a World Trade Organization complaint Friday that challenges U.S. import duties on 22 Chinese products including steel and solar panels, according to press reports, which note that Chinese officials value the exports at $7.3 billion.
The trade battle is unfolding as Obama touts proposals to boost wind power generation and domestic manufacturing of green energy-related equipment.
He’s pushing Congress to extend the longstanding wind energy production tax credit that’s slated to expire at year’s end.
Additionally, Obama is calling for another round of separate tax credits, first authorized in the 2009 stimulus law, for manufacturing a wide range of equipment such as solar panel components, “smart” electric meters, fuel cell components and wind turbines.
The stimulus provided $2.3 billion worth of credits, but applications far outstripped that cap and Obama wants billions of dollars of additional credits made available. But congressional efforts to raise the cap have sputtered in recent years.