China denounces solar tariffs

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BEIJING, Oct. 11 (UPI) -- China has denounced the U.S. decision to raise tariffs on imports of solar panels by Chinese companies.

The U.S. Commerce Department on Wednesday said Chinese producers and exporters have sold solar cells in the United States at dumping margins ranging from 18.32 percent to 249.96 percent.

Commerce said it would impose anti-subsidy "countervailing duties" against solar cell imports ranging 14.78-15.97 percent. That compares with preliminary duties ranging from 2.9-4.73 percent that the Commerce Department announced in March.

China's state-run news agency Xinhua on Thursday quoted China's Ministry of Commerce spokesman Shen Danyang as saying the U.S. decision "signals protectionism" and "hinders the development of new energy."

The decision, Shen said, "runs counter to global efforts to jointly combat the challenges of climate change and energy security, and it breaks the country's promise to not take fresh protectionism measures, which was made at the (Group of 20) summit."

In 2011, imports of solar cells from China were valued at an estimated $3.1 billion, Commerce says.

The tariffs are likely to further erode demand at a time when manufacturing capacity has exceeded demand, said Eric Cheng, analyst at Deutsche Bank in Hong Kong, Recharge reports.

Cheng said exporters may seek ways to get around the U.S. tariffs, such as assembling solar cells manufactured in other countries for modules intended for the United States.

A New York Times report Thursday says U.S. solar panel manufacturers are lobbying the Obama administration for the tariffs to be broadened to include solar panels that are partly manufactured in China and partly manufactured in another country, notably Taiwan.

In Taiwan, for example, most solar manufacturers are running their factories at a 50 percent equipment utilization rate, compared to a rate of 30-60 percent in China, says Jerry Chen, chairman of Giga Solar Materials Corp in Taiwan, told the Taipei Times.

An editorial published by Xinhua Thursday says the Commerce Department's decision will benefit neither the United States nor China but would "escalate trade tensions between the two countries."

The editorial argues that in addition to harming the Chinese solar sector, the Commerce decision would also burden the U.S. solar sector with rising costs amid an economic downturn.

"The Chinese Ministry of Commerce has repeatedly urged the United States to abide by its commitment against protectionism and work together with China and other members of the international community to maintain a free, open and just trade environment," it states.

The U.S. International Trade Commission is to make a final determination on the tariffs by Nov. 23.