U.S. trade panel approves five-year duties on China solar products

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By Doug Palmer | November 8, 2012 7:21 AM EST

The United States gave final approval on Wednesday to duties on billions of dollars of solar-energy products from China for the next five years, providing struggling U.S. producers with a buffer against lower-priced imports.

The U.S. International Trade Commission voted 6-0 in favor of the duties in a case filed last year by SolarWorld Industries America. Beijing has protested the case each step of the way, calling it a protectionist move that threatens the future of the solar-energy sector by driving up costs for consumers.

In a separate 4-2 vote, the ITC rejected making the duties retroactive to 90 days before preliminary duties were announced earlier this year.

SolarWorld, the largest U.S. solar-panel manufacturer, accused Chinese competitors such as Suntech Power Holdings of selling solar cells and panels in the United States at unfairly low prices and receiving government subsidies.

SolarWorld's German parent, SolarWorld AG, is pressing the European Union for similar curbs on Chinese solar products.

Gordon Brinser, president of SolarWorld America, told reporters the ITC vote would allow U.S. solar manufacturers to begin adding jobs, instead of shedding them.

But he said it was essential that the Obama administration stringently enforce the orders to prevent the Chinese from circumventing the duties by bringing in their products via other countries.

He said the 6-0 vote "very clearly" showed that U.S. producers had been harmed by the imports.

OVERSUPPLY COMPLAINT

U.S. and European producers complain that China's rapid expansion of solar panel manufacturing has created a massive oversupply, destroying profits and sending share prices into a tailspin.

The United States imported about $3.1 billion worth of solar cells and panels from China in 2011, up from $640 million two years earlier, although both figures contain some products not covered by the investigation.

U.S. companies that install Chinese solar panels expressed disappointment with the ruling and urged the U.S. and Chinese governments to negotiate a solar-energy trade deal that both sides can accept.

"Going forward, we must avoid a repeat of the SolarWorld saga, as the growth of the solar industry here, in Europe, and around the world is too important to be upended by one company's self-serving crusade," Jigar Shah, president of the Coalition for Affordable Solar Energy said in statement.

China has already struck back by launching an investigation into imports of solar-grade polysilicon from both the United States and South Korea.

Beijing has also warned it could slap duties on polysilicon from the European Union and on Monday it began action at the World Trade Organization against Greek and Italian solar policies that it said unfairly favor domestic firms.

The ITC vote clears the way for the U.S. Commerce Department to issue five-year anti-dumping and countervailing duty orders on those imports, based on rates announced last month.

Suntech, the world's largest producer of solar panels, was hit with combined Commerce Department duties of about 36 percent, while another major Chinese manufacturer, Trina Solar, faces duties of about 23.75 percent.

More than a hundred other Chinese producers and exporters face combined duties of about 31 percent and other Chinese firms combined duties of more than 250 percent.

Chinese firms have been required to post bonds or case deposits based on preliminary duty rates since March in the subsidy portion of the case and since May in the dumping portion.

In the separate 4-2 vote, the ITC rejected the Commerce Department's finding of "critical circumstances," which would have made the duties retroactive to 90 days before the preliminary rates were announced.

SolarWorld had argued critical circumstances were needed to address the surge of imports that came into the United States after its case was announced.

SolarWorld's Brinser said the firm remained disappointed about a Commerce Department decision last month to exclude Chinese panels made with non-Chinese solar cells from the duties.

The company fears this decision will encourage Chinese producers to move more cell production overseas. He said his firm would continue to press the department to close that loophole.

(Reporting By Doug Palmer in Washington and Nichola Groom in Los Angeles; Editing by Eric Beech and David Brunnstrom)

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