A World Trade Organization body said U.S. duties on solar panels made in China violated trade rules, reversing an earlier finding.
A WTO appellate body found that the U.S. Department of Commerce acted "inconsistently" with rules that govern the trade group's 160 members, according to a report released by the Geneva-based organization Thursday.
The decision is a "major victory" against U.S. "abuse of remedy measures," said Sun Jiwen, a spokesman for China's Ministry of Commerce, as cited by the nation's official Xinhua News agency.
The report is a response to China's appeal of a WTO finding earlier this year and hasn't yet been adopted by members of the appellate panel. The Obama administration said Wednesday that it will set duties on solar products from China and Taiwan that may exceed more than 200% combined, as the U.S. and China dispute the role of government in aiding renewable energy companies.
The Commerce Department also completed a plan earlier this month to include in the tariffs any solar panels assembled in China, regardless of the origin of the cells. The U.S. International Trade Commission must rule on this last step before the tariffs go into effect. A decision is due next month.
The duties on solar cells made in China and Taiwan stemmed from a case brought by SolarWorld, a German solar manufacturer with a factory in Oregon.
SolarWorld asked the Commerce Department in 2012 to apply tariffs to solar cells imported from China. After the tariffs kicked in, imports of panels with cells made in Taiwan boomed, and SolarWorld said a year ago that Chinese makers had shifted production to skirt the duties.