As we reported yesterday, the Chinese solar industry is weighing the filing of an anti-dumping and anti-subsidy trade claim against U.S.-based producers of polysilicon, the feedstock for crystalline silicon solar cells.

A representative from the Chinese Photovoltaic Industry Alliance (CPIA)  said that "foreign firms have cut prices on polysilicon to drive Chinese manufacturers out of business," adding, "This has caused the industry to lose more that 2,000 jobs in one province alone," according to the quoted source. The claim also contends, "Foreign countries, led by the United States, have dumped 47,500 tons of polysilicon in China in 2010, 20,000 tons more than the previous year, according to statistics from the Alliance."

This retaliatory measure comes in response to the PV panel anti-dumping claims of SolarWorld and the Coalition of American Solar Manufacturers (CASM). According to CASM, "China is cheating on global trade rules. China’s state-sponsored solar industry is receiving massive illegal subsidies and is illegally dumping crystalline silicon solar products into the U.S. market. The result is a decimation of American manufacturing, American jobs and fair competition. China’s violations of international law make it impossible for U.S. solar manufacturers to compete on a level playing field with Chinese solar manufacturers in our own market, let alone globally."

The Coalition for Affordable Solar (CASE) expressed concern today about the "growing collateral damage and potential job losses caused by SolarWorld’s shortsighted, anti-trade actions."

So, entities in the U.S. are trying to keep China from allegedly dumping PV panels in the U.S. and entities in China are looking to keep the U.S. from dumping polysilicon in China. If the respective trade bodies find that dumping is indeed occurring, onerous tariffs could be levied on Chinese solar panels imported into the U.S. and American polysilicon imported into China.

Jigar Shah, co-founder and chairman of CASE and founder of SunEdison said in a release, “Unfortunately, our worst fears are becoming a reality. SolarWorld’s actions are now threatening to directly hurt all levels of the U.S. solar industry and could undermine decades of industry progress and innovation. Tens of thousands of jobs are now at stake, and for what? Who benefits? It’s becoming painfully obvious throughout the U.S. solar industry that trade wars are jobs killers. In addition, a solar trade war threatens our common goal of making solar electricity affordable for everyone in the U.S. As the world’s two largest energy producers and consumers, the U.S. and China must work together to solve our planet’s energy and environmental crisis."

Who has the most to lose? It's a complicated question, to say the least. And the question elicits high emotion, as it involves money, business, and patriotism. In terms of job loss, which is the main contention of the SolarWorld claim, most of the 100,000 solar jobs in the U.S. are downstream, not in manufacturing. So it could be claimed that U.S. employment figures actually benefit from low-cost solar panels.

The U.S. has a positive trade balance with China, mostly from its shipments of polysilicon. A tariff on polysilicon would change that. Shutting the U.S. out of the Chinese market would be less than constructive as, it has potential to be larger than the U.S. market.

Additionally, if China encounters trade friction in the U.S., they can sell their panels elsewhere. If the U.S. can't sell polysilicon to China, there aren't a lot of alternatives.

"The U.S. solar energy industry is currently experiencing rapid growth, creating new jobs in the United States and exporting key components in the solar value chain to numerous countries, including exporting to China.  U.S. job growth and manufacturing exports, as well as the achievement of U.S. renewable energy goals, are all furthered by the dismissal of the SolarWorld trade case. This trade case, brought by a company that represents approximately two to three percent of the U.S. solar job market, is putting at risk these crucial American objectives and threatening the remaining 97 percent to 98 percent of the U.S. solar industry that is creating jobs and is continuing its progress toward achieving grid parity for solar energy,” said Kevin Lapidus, a CASE spokesperson and Senior Vice President Legal and Government Affairs for SunEdison, a subsidiary of MEMC.

“For the sake of the global solar industry and tens of thousands of jobs, we urge SolarWorld to withdraw its complaint and for China-based PV companies to stand-down in turn. The success of the global solar industry will be achieved through competition and growth, not protectionism,” added Shah.