China Angry About U.S. Tariff Hike On Solar Panels

China's Ministry of Commerce on June 4 sharply criticized as protectionist a U.S. decision to raise tariffs on imports of Chinese-made solar panels by 35.2 percent.

In a statement on its website, the ministry said such practices by the U.S. Commerce Department, which had increased the tariff the day before, "would not solve the development problems of the U.S. solar industry."

In fact, an investigation by the U.S. government and its decision to raise the tariff was based on a complaint by a German-owned solar panel maker, SolarWorld, which owns a factory in Hillsboro, OR. SolarWorld had complained that Beijing was sidestepping existing tariffs by manufacturing the cells in other countries, then assembling them in China.

In its announcement on June 3, the U.S. Commerce Department said the new tariffs will range from 18.56 percent to 35.21 percent, depending on the practices of each Chinese manufacturer. The decision is only preliminary, and a final decision is not expected until later this year, but the U.S. Customs Service can begin collecting the new duties immediately.

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Mukesh Dulani, the president of SolarWorld Industries America in Oregon, called the U.S. decision "a strong win for the U.S. solar industry. But U.S. reactions weren't unanimously favorable. The Coalition for Affordable Solar Energy, which represents the users of imported panels, said it was "deeply disappointed" by the decision and called it "a major setback for the entire U.S. solar industry."

Such groups previously have warned that higher tariffs simply make solar energy more expensive in the United States, slowing its adoption at a time when Americans are searching for alternatives sources of energy. Even so, the cost of solar energy has dropped dramatically in the past few years, in part because of rapidly increased production in China.

This is not the first time the United States has used tariffs to keep its indigenous solar technology competitive. In 2012, it imposed duties of up to 36 percent on panels made from Chinese solar cells. Washington argued that Beijing was giving unfair subsidies of Chinese manufacturers, who then dumped their products on the U.S. market at below the cost of making them.

By Andy Tully of Oilprice.com