Assignment: International Trade
U.S. and European Duties on Solar Panels from China
Beginning in 2009, the value of imports of solar panels from China to the United States grew from $640 million to over $3 billion. During the same time period, American solar panel firms had gone bankrupt. In October 2011, several U.S. companies selling solar panels filed a trade complaint against Chinese firms, arguing that these foreign firms were dumping panels and that they were being subsidized. A ruling by the Department of Commerce (DOC) in October 2012 stated that Suntech Power Holdings Co., Ltd. sold solar panels at 32% below costs and that another producer from China was selling them at 16% below costs. By definition, this is considered dumping in the United States and Europe. DOC recommended that tariffs of 32% be implemented against Suntech and 24% against the second company. Use the graph (that shows trends in installation and price of solar panel) to answer the following questions.
• What were the effects of the alleged dumping in the US market on consumers and producers? Explain
• What were the effects of the antidumping duties (i.e. tariffs of 32% on Suntech and 24% on the second company) on consumers, producers, and the government? Explain
• What was the expected net welfare effect of dumping (before antidumping duties) in the US?
• What was the expected net welfare effect of antidumping duties in the US?
• Was the imposition of the antidumping duty by the US government the right decision? Explain why.
Format your assignment according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the assignment, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.