Larry Downing/Reuters/File
President Barack Obama talks to the media on the Heil Family Wind Farm, in Haverhill, Iowa, in this August 2012 file photo. A lawsuit from a small Chinese company over the blocking of a wind farm project threatens to destabilize US-China trade relations.

Obama administration and China feud over clean energy

A battle over cheap solar panels is ratcheting up tensions between the US and China and further complicating the Obama administration's fraught relationship with clean energy.

The Obama administration can’t seem to catch a break with the clean energy industry these days.

Republicans have used the high-profile bankruptcy of Solyndra, the solar panel manufacturer that received $528 million in federal loan guarantees, to pummel the president on energy policy. Last month, slow sales forced bailout-backed GM to offer hefty discounts for the Chevy Volt. The tepid growth of the electric car industry has led some to question the president's use of taxpayer money to promote alternative fuel sources. 

Now, energy rifts with China are exacerbating tensions between the two countries, while further complicating the Obama administration's relationship with clean energy.

Late last month, Obama blocked Ralls Corp., a small Chinese company, from investing in a wind farm project near the site of a military training site in Oregon. The president invoked a rare power granted by the Defense Production Act of 1950, concerned that the companies backing the project "might take action that threatens to impair the national security of the United States," as the order reads.

Ralls Corp. responded in kind, suing the president. 

A decision Wednesday from the US Department of Commerce threatened to further strain relations between the two countries. The department ruled that Chinese companies, backed by foreign subsidies, were "dumping" solar panels into the US market—selling their products at prices ranging from 18.32 to 249.96 percent below fair value.

The final ruling would impose tariffs of 24 percent to 36 percent on solar panels imported from China, the New York Times reported. 

"The impact on the domestic industry has just been devastating. I think we're unfortunately up to 13 companies where there has been either a shutdown or a bankruptcy or significant work layoffs due to the Chinese imports," Tim Brightbill, lead attorney for SolarWorld Americas and other US producers told Reuters in the days leading up to the ruling.

It's not the first time the Commerce Department has imposed tariffs on China for dumping activities. In June, the department found that Chinese companies were illegally selling wind turbine towers below their market price and would have to pay duties of 20.85 to 72.69 percent on imports.

The recent jabs are the latest in an ongoing back-and-forth between an administration protective of American manufacturers and an economic juggernaut flooding the global clean energy market with inexpensive products.

"The United States is provoking trade friction in the new energy sector," Shen Danyang, China's Commerce Ministry spokesman, told Reuters, "and sending a negative signal to the world that stirs global trade protectionism and obstructs the sector's development." 

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