- The US and Chinese government have signed what they call as Phase-I bilateral trade agreement breaking the deadlock in the business between the two countries that has been on for quite some time now
- Under the deal agreed upon, China will buy an additional $200 billion worth of goods and services from the US over the next two years
- REC Silicon, Wacker Polysilicon and Hemlock Semiconductor have hailed the agreement as this will re-open the way for them to access Chinese market
- It is now China that gets to decide how it wants to implement the agreement
The US and China trade deadlock has made some headway after the governments of the two countries signed Phase I of a bilateral agreement under which the Asian country has agreed to buy at least $200 billion more in goods and services from the US over the next two years – and the ‘trajectory is expected to continue even after 2021’.
Rejoicing the agreement are the ‘three remaining’ solar grade polysilicon manufacturers in the US, namely REC Silicon, Wacker Polysilicon and Hemlock Semiconductor Operations that have suffered the brunt of China imposing tariffs on US made polysilicon while heavily subsidizing their Chinese companies in the field since 2014. This action of the Chinese government, claim the trio, has led to massive overcapacity of polysilicon in China, burdening the global industry and worsening conditions of the US industry.
Even though the ball is now in China’s court with regard to the implementation of the agreement, the three manufacturers believe inclusion of polysilicon in the first phase reflects ‘recognition by U.S. government officials of the U.S. polysilicon industry’s strategic significance to American defense and energy industries and future manufacturing innovation’.
In October 2019, the three manufacturers approached the US government urging it to include Chinese tariffs on US polysilicon in its ongoing trade talks with China (see US Firms Want End To Chinese Tariffs On US Polysilicon).
Looks like their efforts paid off – in a joint statement by the three companies, REC Silicon CEO and President Tore Torvund said, “While we hope that this partial restoration of access to China’s polysilicon market will improve the outlook for U.S. polysilicon producers, it’s imperative that the U.S. continues to focus on developing and strengthening critical links in the solar value and supply chains, providing a market for our polysilicon and other U.S. solar manufacturers here in the vibrant domestic U.S. solar market.”
Pointing out that the deal between the US and China will do nothing to relax the solar tariffs, Solar Energy Industries Association (SEIA) Vice President of Market Strategy, John Smirnow said it still is a positive development for the US solar industry.
“Credit to the Trump Administration for cutting a deal that gives relief to U.S. polysilicon production companies,” stated Smirnow. “We hope this deal will start a much-needed discussion with the administration about how we can scale back the tariffs on solar products more broadly, while continuing to build American solar manufacturing.”
According to the White House, the deal as reached relates to China purchasing US manufactured goods, agriculture, energy and services. Complete details of the Phase-I trade agreement with China can be viewed on the White House website.