Bankruptcy for Solyndra. Is it China's fault?

Bankruptcy of the third US solar company in recent weeks has some Democrats accusing subsidized competition from China. Could revamped trade policy protect 'green' firms from bankruptcy?

By , Reuters

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    A worker shows products in a factory of Astronergy, a China-based solar-panel-maker, in Hangzhou, in eastern China's Zhejiang province in this file photo from 2009. The bankruptcy of a third US solar company is prompting senior Democrats to urge stronger trade action against China.
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Senior U.S. Democrats urged the Obama administration and Congress to take action againt Chinese trade policies they said are unfairly hurting America's environmental technology sector and making it harder to create jobs.

``China is systematically deploying an arsenal of trade distorting policies to corner the global market in green technology products, whether it be electric cars, wind turbines or solar products,'' RepresentativeSander Levin, a Michigan Democrat, said in a statement.

``Our efforts to put Americans back to work are made all the more difficult by China's policies, and it is time we take action to counter them -- either through aggressive use of our domestic trade laws or through WTO cases,'' Levin said as lawmakers returned from a month-long break.

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Last week, Solyndra LLC filed for bankruptcy, becoming the third U.S. solar firm to succumb to pressure from lower-priced Chinese rivals in recent weeks.

Levin is the top Democrat on the House of Representatives Ways and Means Committee, which has jurisdiction over trade.

Committee Chairman Dave Camp, a Michigan Republican, has promised hearings on China trade concerns but has not committed to passing legislation.

Concern about Beijing's trade policies is fueled by the huge U.S. trade deficit with China, which hit a record $273 billion in 2010 and could surpass that this year, and by persistently high U.S. unemployment.

``This deficit is, without question, the single most important issue on the trade agenda today, and we look forward to continuing to work with the administration and our Republican colleagues to address it,'' Representative Jim McDermott, a Washington Democrat, said.

House Minority Whip Steny Hoyer also told reporters on Tuesday Democrats would push for a vote on a bill to allow the Commerce Department to treat Chinese ``currency manipulation'' as an actionable subsidy under U.S. trade law.

Many U.S. lawmakers say China deliberately undervalues its currency against the dollar to give its companies an unfair price advantage in international trade.

WTO UPHOLDS OBAMA DECISION ON TIRES

Meanwhile, U.S. trade officials touted a U.S. victory against China at the World Trade Organization that was announced on Monday when many Americans were enjoying the Labor Day holiday weekend.

A WTO appellate body upheld President Barack Obama's decision in 2009 to impose emergency restrictions on imports of tires from China for three years.

China agreed as part of its entry in the WTO to allow countries to impose such ``safeguard'' restrictions through 2013 in response to a market-disrupting surge.

Obama hiked the normally 4-percent tariff on tires to 35 percent in the first year of the safeguard, 30 percent in the second and 25 percent in the third.

Tim Reif, general counsel in the U.S. Trade Representative's office, called the appellate decision a ''tremendous victory'' for the United States.

The United Steelworkers union, which pressed Obama to curb the imports, has credited his decision with saving jobs and encouraging U.S. tire manufacturers to expand operations.

But Ed Gresser, an analyst for ProgressiveEconomy, said trade data shows suppliers from South Korea,Taiwan and other countries in Asia increased their sales to the United States after Obama imposed his curbs.

Americans imported 75.5 million tires in first six months of 2011, not that much less than the 77.5 million in the first six months of 2008, Gresser said.

However, imports from China totaled just 15.3 million in the first of half of this year, compared to 24.9 million in the first half of 2008, he said.

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