REC Silicon watches US, China trade dispute

MOSES LAKE - Officials at REC Silicon are keeping a close eye on an ongoing trade dispute with China involving heavy tariffs on U.S.-made polysilicon.

The Chinese government announced their plans to impose the tariffs last month, REC general counsel Francine Sullivan said Tuesday. Polysilicon bought from REC specifically would end up having a 57-percent duty added, she said.

That poses a problem because a majority of the polysilicon made at REC's Moses Lake plant goes to Chinese customers, Sullivan said.

"China is the biggest market for Moses Lake," she said. "At the moment, we're dealing with a regulatory issue that potentially could cause some problems with our access to that market.

About 80 percent of the company's customers are in China, REC Silicon Executive Vice President Tore Torvund said during a Grant County Economic Development Council meeting last August.

He explained that any added cost to their products could result in REC Silicon losing business to Chinese or Korean companies that could provide the same products for less.

According to Sullivan, the trade dispute has been ongoing since China launched a trade case against polysilicon imports from the United States, Korea and the European Union about a year ago. The duties announced last month are preliminary, as a final decision on the case isn't expected until next February, she said.

China's case against polysilicon imports is widely seen as a response to a previous U.S. trade case that resulted in duties on Chinese solar cells, Sullivan said. Because of the political motivation behind the dispute, company officials are seeking the help of state and national leaders, she said.

"This isn't an operational problem at REC, this isn't a competitiveness problem - this is a political problem," said Sullivan. "Political problems require political solutions."

She said REC has received a lot of support from Washington legislators, including Gov. Jay Inslee and U.S. Sens. Maria Cantwell, D-Wash. and Patty Murray, D-Wash.

"They have been enormously helpful, helping us elevate the importance of this and push the message both with the White House and the USTR (Office of the United States Trade Representative)," she said,

REC also has a Montana plant, and legislators there have pledged similar support, Sullivan said.

She said REC does not foresee a reduction in production or layoffs at either plant.

"Things are progressing positively, it's a challenging matter but people are very focused on this in Washington D.C.," Sullivan said.

A final decision in the case isn't expected to be handed down until next February, but Sullivan said she hopes a political resolution is achieved before then.