A Break for American Manufacturers

China ends wind turbine subsidies.

It seems that speaking up can work. The U.S. had challenged the Special Fund for Wind Power Equipment Manufacturing (Special Fund) subsidies at the World Trade Organization (WTO) following an investigation initiated in response to a petition filed by the United Steelworkers.

The grants, provided to Chinese companies that agreed to use key parts and components made in China rather than purchasing imports, could have totaled several hundred million dollars since 2008, U.S. Trade Representative Ron Kirk said. The size of the individual grants ranged between $6.7 million and $22.5 million.

"This is a step in the right direction for American manufacturers," said U.S. Sen. Sherrod Brown (D-OH). "We've seen the damage Chinese subsidies have had on American manufacturers, particularly when American stimulus dollars went to Chinese wind manufacturers -- companies that had an unfair advantage because they were subsidized by the Chinese government."

More than 70% of the components of clean energy systems are produced outside the U.S, Brown said. "The United States cannot replace its dependence on foreign oil with a dependence on clean energy technology abroad."

Brown has a particular interest in this industry as he is trying to bolster domestic production of clean energy components and to make his home state, Ohio, the "Silicon Valley of Clean Energy Manufacturing." To that end he reintroduced legislation that would expand and improve the Advanced Energy Manufacturing Tax Credit (48C) program. The Security in Energy and Manufacturing (SEAM) Act would extend the program and allow for grants in lieu of tax credits. This would enable the program to reach additional companies that would otherwise be unable to utilize the program -- new companies that do not yet have tax liabilities or companies that struggle to find credit in today's tight financial market, Brown explained in a statement.

The steel workers were happy with the news as well. "The Steelworkers Union petition and the Obama Administration's pursuit of our complaint on the Special Fund provisions brought the Chinese to the table with a commitment to end this program," said Leo W. Gerard, the International President of the United Steelworkers.

Gerard was quick to point out that the celebration can't be the end of the story. "We need continued action on our other complaints in our petition to ensure that China's protectionist and predatory practices in the clean tech energy sector are eliminated."

TAGS: Trade
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