Norway-based REC Silicon warned Tuesday it may soon shutter its plant in Moses Lake and lay off roughly 400 employees if the U.S. and China countries don’t resolve a trade dispute over solar panels that’s now stretching into its fourth year.
As a dispute between China and the United States over solar trade stretches into its fourth year, Norway-based REC Silicon warned Tuesday it may soon shutter its plant in Moses Lake and lay off roughly 400 employees if the two countries don’t come to an agreement.
The REC plant produces polysilicon — the main material in solar panels — and has been caught in the crosshairs of a global trade dispute since 2012.
Earlier this summer the company reduced production capacity in Moses Lake by 50 percent. It said Tuesday that if the trade dispute continues, “a complete shutdown of its remaining production capacity” will be required.
The issue came to a head in 2013 when China slapped hefty duties on U.S.-made polysilicon in a move widely seen as retaliation for American tariffs imposed the previous year on imports of Chinese solar panels to the U.S.
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China’s solar-panel producers were left facing a 57 percent tariff on polysilicon bought from REC, raising the likelihood that they’d get the raw material elsewhere. For 18 months, however, there was loophole available, said REC general counsel Francine Sullivan.
That loophole closed earlier this month, putting the Moses Lake plant at risk because 80 percent of the plant’s polysilicon goes to customers in China, Sullivan said.
“We are at a critical juncture,” she said. “We are looking at this every day. If we can’t get a resolution in the short term, we will be faced with this tough decision.”
The warning comes as Chinese President Xi Jinping is in Seattle promoting the long-standing economic ties between Washington and China.
Sullivan calls the visit a pretense of cooperation because “at the same time China is needlessly crushing 400 jobs in Washington state” by not making a deal that would benefit both countries.
REC Silicon’s CEO Tore Torvund said there is a proposal on the table to resolve the stand-off. “We do not understand why China has not yet seized this unique opportunity,” which would be mutually beneficial and would give China substantial financial returns, he said in a statement.
Sullivan says details of the negotiations and resolution are not publicly available.
Gov. Jay Inslee said Tuesday he is deeply troubled by REC’s situation and is pushing for a quick resolution.
He said he and his staff have been involved in dozens of conversations with the U.S. and Chinese governments and domestic stakeholders since 2013 to reach a resolution on this issue and allow fair access to the Chinese market for American polysilicon manufacturers.
Important progress had been made over the summer, “but the situation now demands urgent resolution,” he said in a statement.
“While we in Washington look forward to hosting Chinese leaders this week and exploring economic and cultural opportunities that will benefit our state and both nations,” he said, “there remain outstanding issues that must be resolved in the spirit of economic collaboration.”