(U.S. green energy, China tariff vote in Congress story, updated for reaction from U.S. business community)NEW YORK ( TheStreet) -- Congress is considering slapping a tariff on Chinese imports as retaliation for China's stubbornness over currency policy, and such a move could have implications for green-energy stocks. Green energy companies have been a focus of the economic battle between the U.S. and China. A few weeks ago, the United Steelworkers Union filed a petition with the U.S. government claiming that China's support for its green-energy companies was a violation of international trade laws. Treasury Secretary Tim Geithner was called to testify before the Senate a week ago also, and while the Senate hearing was specifically about China's currency policy, Geithner was asked specifically about the green energy sector and the United Steelworkers petition. The new House measure, passed by the Ways and Means committee last Friday and headed for a full vote in the U.S. House of Representatives this week, would let the United States apply duties on goods from countries with undervalued currencies. It would more or less make good on the threat to penalize China for keeping its currency artificially weak, which is the central point of debate in the economic argument over Chinese products having an unfair trade advantage. If such a measure was passed by Congress, it might be a positive for First Solar ( FSLR - Get Report), the cost leader in the solar sector. The low-cost Chinese solar module makers, led by Trina Solar ( TSL), Yingli Solar ( YGE), Solarfun Power ( SOLF) and Jinko Solar ( JKS), have been coming closer and closer to First Solar in the cost race. However, First Solar still holds a cost advantage, particularly as the price of polysilicon on the spot market has gone back up from its lows of 2009. Any tariffs slapped on Chinese imports would give First Solar a little more breathing room versus the Chinese low-cost module suppliers looking to increase their exposure to the U.S. solar market. All the big Chinese players, from Trina to Yingli and Suntech Power ( STP) are increasing their sales in the U.S. On the other hand, the U.S. solar market is still a relatively small, though growing portion of solar module sales. Additionally, the Chinese solar cost-advantage is so pronounced versus most Western companies that any tariff might not change the cost equation much, and it might not disadvantage Chinese solar companies versus the most expensive solar module makers from the U.S., like SunPower ( SPWRA)
GE) and Citigroup ( C), did hold a press briefing on Monday to state that its member companies don't support the congressional China tariff measure. The Chamber of Commerce argues that China may retaliate against U.S. businesses operating in China if Congress takes action aimed at forcing China to revalue its currency. Robert Roche, the chairman of the American Chamber of Commerce in Shanghai, said at a briefing in Washington on Monday that the U.S. congress is taking steps that will lead China to step up the rhetoric about the U.S. being a "bad guy," in the same way that Japan was once Economic Enemy No. 1 in China. Additionally, critics say the congressional rhetoric works against itself. Foreign pressure on China to revalue its currency will only serve to push China further from taking action, as the country may fear that it will be judged as bowing to international pressure as opposed to looking out for its own best interests. Niche U.S. solar company Evergreen Solar ( ESLR) has moved much of its manufacturing operations to China in a bid to remain competitive, and it's unclear what impact such a Congressional measure would have on a U.S. company manufacturing in China and importing its Chinese solar modules to the States. Evergreen Solar, which is already under threat of de-listing, as its stock has traded under $1 for a prolonged period of time, wouldn't want to see any imports from China -- even those made by a U.S. company, and slapped with a tariff -- as its move to China was predicated on reducing its costs.
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