Washington state feeling pain from US trade rift with China

(From McClatchy DC)

Solar panel company says Chinese tariffs forced suspension of work at Washington state plant

State’s top politicians call for a quick end to the trade dispute

China is Washington state’s largest trade partner, destination for most of its exports

By Rob Hotakainen

As Republican front-runner Donald Trump threatens a trade war with China, Washington state is getting a bitter taste of the stakes involved.

The 550-acre Moses Lake, Wash., complex was the only place where REC Silicon made polysilicon primarily for the solar industry.

The 550-acre Moses Lake, Wash., complex was the only place where REC Silicon made polysilicon primarily for the solar industry.

Washington, the nation’s most trade-dependent state, sends nearly a quarter of its exports to China, which ranks as its largest trading partner.

On Monday, that relationship took a hit when REC Silicon said it would temporarily shut down its operations in Moses Lake, Washington, citing a dispute with China over tariffs on solar panels. The company produces polysilicon, which is used to make the panels.

Democratic Sens. Patty Murray and Maria Cantwell joined Gov. Jay Inslee in calling for an immediate end to the dispute over tariffs imposed by the U.S. and China. Eric Schinfeld, president of the Washington Council on International Trade in Seattle, said the company’s decision was a prime example “of why we can’t afford to get into a back-and-forth trade battle” with China.

“Our two economies are inextricably linked,” he said Tuesday.

Indeed, a trade rift with China would be particularly costly for Washington state, where studies have shown that nearly 40 percent of jobs are tied to global commerce.

With its relative proximity to Asia, Washington state sent nearly 23 percent of its $20.7 billion in exports to China in 2014, according to the International Trade Administration. Canada ranked a distant second as a recipient of the state’s exports, with $9.3 billion.

REC Silicon, which employs roughly 720 workers in Moses Lake in central Washington, said it would not lay off any workers but would shift them from production to maintenance with the shutdown, which is expected to last at least until June. The company used a $154 million grant from the 2009 American Recovery and Reinvestment Act to complete a $1.7 billion expansion project in 2010.

In a statement, Inslee called the company’s announcement “a disappointing development” and said REC Silicon “is now unfairly caught in an international trade dispute that threatens its survival.” He wrote a letter last year to President Barack Obama urging a resolution and brought up the subject with Chinese President Xi Jinping when Xi visited Seattle in September.

The dispute began in 2012, when the United States accused China of dumping solar panels below cost on the U.S. market and imposed tariffs. China responded in 2013 by placing tariffs on polysilicon made in the United States. Now Chinese producers who want to buy from REC Silicon must pay a 57 percent import duty, which is leading them to go elsewhere.

Murray and Cantwell said they had also met with top Chinese trade officials in an attempt to end the dispute. Read more



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