Commerce to Consider CV Duties for Currency Undervaluation in China Solar Cells Review
The Commerce Department will consider allegations of currency undervaluation as a subsidy program in an ongoing countervailing duty administrative review on crystalline silicon photovoltaic cells from China (C-570-980), the agency said in a memo filed Sept. 10. The American Alliance for Solar Manufacturing submitted the allegation in July, arguing China “undervalues its currency through intervention in the Chinese renminbi (RMB) – U.S. dollar (USD) exchange rate and thus subsidizes companies in China that receive more RMB in exchange for USD earned on their export than they otherwise would, absent the [government of China (GOC)’s] involvement.”
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The petitioners cite information on the record of a CV duty investigation on twist ties from China completed in April in support of its allegation. They say Treasury made a determination during that investigation that China’s exchange rate actions resulted in an RMB undervalued by about 5%. Commerce would in the twist ties investigation go on to defer its decision on whether currency undervaluation was a countervailable subsidy until its first administrative review, which has not yet begun. The agency did the same in another investigation on chassis from China. Commerce filed a letter Sept. 10 seeking a report from Treasury to inform its decision in the solar cells review.
The petitioners say that China’s “currency undervaluation provides a financial contribution to Chinese exporters” as a direct transfer of funds “through the provision of RMB in exchange for U.S. dollars by Chinese state-owned commercial banks (SOCBs) or other state-controlled banks,” and “through private entities entrusted or directed by” the Chinese government “because they provide RMB to exporters for USD at rates that are controlled by the GOC.” They say the subsidy is specific because “enterprises in China that buy or sell goods internationally are collectively the predominant users of the net foreign exchange supply,” according to Commerce.
Commerce first imposed CV duties for currency undervaluation on Vietnamese tires in November 2020 (see 2011040034), after issuing regulations in February 2020 giving it that authority (see 2002030016).