U.S. government sets stiff tariffs on China solar panels

WASHINGTON -- The Obama administration moved Thursday to impose stiff new tariffs on solar panels made in China, finding that Chinese companies are improperly flooding the U.S. market with government-subsidized products.

The Commerce Department said Chinese producers had dumped solar cells and panels in the United States at margins ranging from 31 percent to nearly 250 percent. If the preliminary ruling is upheld, tariffs averaging 31 percent could be imposed on Chinese solar-panel imports.

The tariffs would be in addition to fees ranging from 2.9 percent to 4.73 percent imposed in March after the department found that China is improperly subsidizing its solar manufacturers.

The tariffs announced Thursday were higher than expected and could ratchet up trade tensions between the two countries.

Several U.S. solar panel makers, led by Oregon-based SolarWorld, had asked the government to impose steep tariffs on Chinese imports. They are struggling against stiff competition from China as well as weakening demand in Europe and other key markets.

A majority of U.S. solar panel installers oppose tariffs on Chinese panels, arguing that less expensive imports have helped make solar panels more affordable for U.S. customers, just as President Barack Obama and many governors are working to promote renewable energy.

The solar companies also worried that China could retaliate against U.S. companies doing business there, noting that Chinese authorities have announced their own probe into whether U.S. support for renewable energy companies hurts foreign suppliers.

"This is the first step to a trade war between the U.S. and China," said Jigar Shah, leader of a coalition of solar companies that oppose U.S. tariffs.

The Commerce Department decision will increase solar electricity prices in the United States "precisely at the moment solar power is becoming competitive with fossil-fuel-generated electricity," said Shah, president of the Coalition for Affordable Solar Energy.

Members of the coalition include California-based SunEdison, Recurrent Energy, SolarCity and Westinghouse Solar, as well as China-based Suntech Power Holdings Co., one of the companies affected by the Commerce case.

SolarWorld president Gordon Brinser said the Commerce Department merely confirmed that Chinese manufacturers have illegally dumped solar cells and panels in the U.S. market, giving their products an unfair advantage.

The ruling "will re-establish a natural balance in pricing that does need to occur in the global marketplace," Brinser said, adding that the U.S. solar market has been "distorted" by cheap Chinese imports.

SolarWorld Industries America Inc., a subsidiary of Germany's SolarWorld AG, is the largest U.S. maker of silicon solar cells and panels. The company was joined by six other manufacturers, including Wisconsin-based Helios Solar Works, in filing the unfair trade complaint.

Brinser, of SolarWorld, said "doomsday" predictions by Shah and other critics that U.S. tariffs will lead to the loss of thousands of U.S. jobs were overstated.

Solar power is growing rapidly in the United States, Brinser said, adding that demand for solar panels will continue to rise as states set standards for renewable energy and consumers see benefits from solar power.

Commerce also granted SolarWorld's request for a finding of "critical circumstances" to counter a recent flood of Chinese imports into the U.S. market ahead of the widely anticipated decision. As a result, preliminary dumping tariffs will be imposed retroactively 90 days from the date the decision is published in the Federal Register.

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