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US-China solar row flares up

June 4, 2014

The US has imposed fresh import duties on solar panels from China in a move that aims to curb trade practices but could inflame tensions between the world's two largest economies.

Solar panels in China
Image: picture-alliance/dpa

The United States will now require importers of Chinese solar panels to pay steep duties after a decision by the Commerce Department ruled Beijing was unfairly subsidizing Chinese manufacturers.

The ruling, which came Tuesday amid a protracted trade dispute between the world's two largest economies, will see preliminary tariffs ranging from 18.56 to 35.21 percent imposed on solar equipment originating from the People's Republic.

Beijing expressed dissatisfaction with the decision, posting a statement to the Chinese Commerce Ministry's website that said the US "ignored the facts" and the duties "won't solve the problems of the US solar industry."

Pending a final ruling from Washington, US customs officials have been instructed to require cash payments at the border based on the preliminary rates.

The case stems from a complaint filed by the German solar manufacturer SolarWorld AG, which has a branch in the US. It stated that Chinese companies were undercutting their competitors by taking money from Beijing and dumping their goods into the US market at an unfairly low rate.

The US started enforcing stiff tariffs on solar cells from China in 2012, but manufacturers there were reportedly able to make use of a loophole that allowed them to skirt the duties by using non-Chinese solar cells to compile panels. The Commerce Department's latest ruling aims to plug that loophole.

The European Union, once a leading buyer of Chinese solar materials, overcame a similar trade dispute with Beijing last year that saw the trade partners agree on a minimum price for imports.

cjc/uhe (Reuters, Bloomberg)