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China rails at 30 percent tariff on solar panels

China says the US is "deliberately provoking trade friction in the clean energy sector." The US says  Chinese exporters were dumping cut-price solar panels in the US market.

By Matt Daily and Leonora WaletReuters / May 18, 2012

Chinese workers examine solar panels at a manufacturer of photovoltaic products in Huaibei, China. China rejected a US antidumping ruling against its makers of solar power equipment and Chinese manufacturers warned proposed punitive tariffs might hurt efforts to promote clean energy.

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The United States imposed punitive tariffs on solar panel imports from China, the latest in a series of trade disputes between the world's two biggest economies and sparking accusations by Beijing of protectionism.

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The new tariffs of around 30 percent, much bigger than had been expected, were set on Thursday by the U.S. Commerce Department after it ruled in favor of local firms which said Chinese exporters were dumping cut-price panels on their market.

The size of the tariffs is larger than Chinese companies had expected and some analysts said it might prompt them to manufacture elsewhere or look for alternative markets.

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"The US decision lacks fairness and China expresses its strong displeasure", a spokesman for China's Ministry of Commerce, Shen Danyang, said in a statement posted on the ministry's website (www.mofcom.gov.cn).

"By deliberately provoking trade friction in the clean energy sector, the U.S. is sending the world a negative signal about trade protectionism," Shen said.

However, Beijing stopped short of threatening immediate retaliation.

"We believe these measures by the United States damage China-U.S. cooperation in the renewable and clean energy sectors ... We hope the United States can appropriately resolve the relevant issues and take practical steps to respond to China's demands," Foreign Ministry spokesman Hong Lei said.

The tariffs apply to most top Chinese exporters, including Suntech Power Holdings Co Ltd and Trina Solar Ltd, at about 31 percent.

President Barack Obama, running for re-election in November, has promised to crack down on what he said are unfair Chinese trade practices.

The United States already has punitive duties on steel pipe, pencils, electric blankets and bedspring imports from China and was also reported in March to be investigating if imports of stainless steel sinks are sold at unfairly low prices.

TRADE DUTIES

Chinese officials have threatened to impose trade duties on U.S. shipments of polysilicon, the key material used in solar panels, if the U.S. moves to penalize Chinese solar companies.

"The anti-dumping ruling increases the risk of retaliatory action by Chinese government on U.S. polysilicon imports into China," Deutsche Bank said in a report.

The solar panel ruling follows a complaint filed last October by the U.S. subsidiary of Germany's SolarWorld AG, and six other U.S. companies that alleged unfair competition and had sought duties well above 100 percent.

"The decision sends a clear signal: free trade does not mean there are no rules," Frank Asbeck, chief executive of SolarWorld told Reuters.

"We expect the U.S. decision will serve as an impulse to the EU," Asbeck said, adding the company - whose shares rallied as much as 18 percent on the move - was still trying to file a similar complaint in Europe by mid-2012.

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