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Chinese Solar Company Shuts U.S. Factory

RENEE MONTAGNE, HOST:

The Chinese solar company Suntech announced yesterday it will shut down its only factory here in the U.S.

As Peter O'Dowd reports from member station KJZZ, recent U.S. tariffs played a role in the plant's failure.

PETER O'DOWD, BYLINE: Suntech had been making solar panels in the Phoenix suburb of Goodyear for two years. But in that time, GTM Research analyst Shyam Mehta says the global price of solar panels had fallen by more than 60 percent.

SHYAM MEHTA: Suntech in particular has been hit very hard financially. It's currently actually struggling for survival.

O'DOWD: The industry has been sagging under a global oversupply problem, and a trade war has made matters worse. Last year, the U.S. International Trade Commission slapped a 36 percent tariff on Chinese solar cell manufacturers, for dumping cheap products on the U.S. market.

[POST-BROADCAST CLARIFICATION: While the trade commission found that Chinese companies have damaged the U.S. solar industry, it was the U.S. Department of Commerce that took those findings and initiated the tariff on Chinese manufacturers.]

That drove up the cost of components Suntech imported to Arizona. Mehta says it's another reason manufacturing here became too expensive.

MEHTA: Closing down this factory is one of the lower-hanging fruit approaches and the more obvious ways of going about restructuring.

O'DOWD: The factory will close in April, taking 43 jobs with it. Barry Broome says the tariff doesn't preserve the U.S. solar market, it actually hurts it.

BARRY BROOME: This is a global industry. Its connections are interdependent upon each other. And when you start to fracture a connection like U.S.-China, you're going to see an announcement like Suntech.

O'DOWD: Broome's Greater Phoenix Economic Council had warned the tariff would stunt foreign investment in Arizona's emerging solar industry. Now, Broome says that fear has been realized.

For NPR News, I'm Peter O'Dowd.

(SOUNDBITE OF MUSIC)

MONTAGNE: This is NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

Corrected: March 26, 2013 at 12:00 AM EDT
We say the U.S. International trade commission put a tariff on Chinese solar cells. While the trade commission found that Chinese companies have damaged the U.S. solar industry, it was the U.S. Department of Commerce that took those findings and initiated the tariff on Chinese manufacturers.