US China Solar Panel Wars Heat Up As US Sets New Import Duties

The U.S. Commerce Department on Tuesday imposed new import duties from up to 35 percent on solar panels and related products from China after ruling that Chinese government subsidies were used to make the products, straining trade relations between the two countries.

The ruling, though preliminary, closes a loophole that allowed Chinese solar-equipment makers to avoid U.S. tariffs.

China’s Commerce Ministry said Wednesday that it was “strongly dissatisfied” with the ruling and warned that it would worsen trade relations between the two countries. The move “is an abuse of trade remedies, has an obvious hint of trade protectionism and will inevitably lead to the escalation of trade disputes between China and the U.S.,” the ministry said in a statement cited by several news media outlets.

The U.S. decision was prompted by a petition of charges filed in October 2011 by SolarWorld Industries America Inc., the U.S. subsidiary of Germany’s biggest solar-panel maker SolarWorld AG. SolarWorld, based in Hillsboro, Oregon, claimed that some Chinese companies avoided U.S. tariffs by shipping solar-cell parts to locations like Taiwan, where the solar cells were made, then shipped back to China to be assembled into solar panels.

Producing solar panels in such a way avoided U.S. tariffs set in 2012 on Chinese solar panels that contain solar cells made in China.

The new tariffs will require a final ruling by the U.S. Commerce Department and the U.S. International Trade Commission, and a similar ruling to close another loophole in anti-dumping tariffs is expected in July, SolarWorld said.

“Today is a strong win for the U.S. solar industry,” Mukesh Dulani, president of SolarWorld Industries America, said Tuesday. “We look forward to the end of illegal Chinese government intervention in the U.S. solar market, and we applaud Commerce for its work that supports fair trade.”

In the U.S. solar industry, competition from China has squeezed out some American manufacturers while developers, installers and consumers have benefited from the inexpensive panels.

China imposed its own tariffs in January on American and South Korean polysilicon, the main ingredient in conventional photovoltaic solar panels, and conditional tariffs in May for imports from several European countries.

Last month, the U.S. Justice Department accused five Chinese military personnel of cyberattacks against American industrial targets, including SolarWorld, which alleged its computers were broken into and financial and legal documents were stolen after it filed trade complaints against Chinese manufacturers.