US Firms Want End To Chinese Tariffs On US Polysilicon

• Three renowned US polysilicon manufacturers are asking the US government to include the end to Chinese tariffs on US made polysilicon a part of the ongoing trade talks with China
• The three companies, REC Silicon/HSC/Wacker Chemie, pointed out that US polysilicon exports to China have reduced by around 90% between 2011 and 2018 thanks to the Chinese tariffs
• Demand is also to extend federal solar tax credit, and at the same time to introduce programs and investment incentives to develop critical links in the US solar value and supply chains

Ever since China imposed tariffs on US made polysilicon in 2014, US polysilicon exports to the Asian giant have come down by close to 90% from $1 billion in 2011 to $107 million in 2018. And this is hurting the US polysilicon industry big time, said the US polysilicon manufacturers .

The three largest US based manufacturers of polysilicon—REC Silicon, Hemlock Semiconductor Operations (HSC) and Wacker Chemie AG—met up with the US House Manufacturing Caucus to ask for an end to these tariffs.

Their demand is for the government to include polysilicon in the ongoing trade talks with the Chinese counterparts and for the federal solar tax credit to be extended, while introducing programs and investment incentives to develop and strengthen critical links in the US solar value and supply chains.

They argue that the tariffs are putting the US polysilicon industry, what is now worth over $10 billion, at risk since polysilicon is a key ingredient not just for solar cells that use it to make ingots and wafers but also for sectors such as smartphones, autonomous vehicles and electronics. Jobs in the industry are at stake too.

"Preserving US production capacity is vital for maintaining US competitive advantages in critical defense, energy and innovation industries," said Phil Dembowski, Senior Vice President and Chief Commercial Officer of HSC. "Through these tariffs, China is effectively trying to corner the world market on this important building block for the solar and electronics industries."

The three aggrieved parties pointed out that their businesses have been at the receiving end of the situation. REC Silicon has had to shut down its $1.7 billion polysilicon plant in Moses Lake, Washington, while HSC had to shutter its Tennessee plant in 2014 soon after the tariffs were imposed.

Germany's Wacker Chemie, which produces polysilicon at its $2.5 billion Tennessee plant, has had to bring down its 2019 sales guidance due to lower prices for polysilicon which it says is also due to the overcapacity created by Chinese competitors (see Polysilicon Prices Force Wacker To Lower 2019 Guidance).

"We produce some of the lowest cost high-purity polysilicon in the world at our US plants, but China's actions have forced us to halve our production and lay off around 600 workers," complained Francine Sullivan, REC Silicon's vice president of Business Development. "Allowing the Chinese to have these unfair tariffs while subsidizing its own polysilicon production is costing the US high paying jobs and billions of dollars in investment."