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Solar panels from China to face new U.S. tariffs

In a significant decision involving one of the world’s most sought-after industries, the U.S. is gearing up to impose duties on imports of Chinese solar panels after finding evidence that China’s government provided illegal subsidies to its export manufacturers.

In a preliminary finding released Tuesday, the Commerce Department said it would start levying duties ranging from 2.9% to 4.73% on Chinese imports of solar panels, as well as panels made in other countries that have Chinese-made solar cells.

The decision is the latest in what appears to be a stepped-up campaign by the Obama administration to get tough with China on trade. There was no immediate reaction from Beijing, but Chinese officials have bristled at the threat of duties imposed on their manufacturers in a globally competitive industry that Beijing sees as critical for its economic security.

The amount of the preliminary duties, however, was much smaller than the double-digit tariffs that many in the U.S. were expecting. The duties correspond to the subsidy rates that U.S. investigators found in Chinese panel suppliers. It was widely assumed that the Chinese government support for the solar panel industry was as much as 30%. The subsidies include such things as government loans, preferred land prices and tax breaks.

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SolarWorld Industries America and six other U.S. companies, whose complaint launched the investigation, nonetheless applauded the ruling Tuesday.

Gordon Brinser, president of SolarWorld, said in a statement that the decision would help restore fair competition in the market and advance the U.S. solar industry’s “reach for greater national energy, economic and environmental security.”

The Commerce Department is also investigating allegations that Chinese solar cell and panel makers sold products at below-market prices. A preliminary determination on whether separate anti-dumping duties would be imposed is expected to be announced May 17.

The new tariff related to subsidies brought claims of vindication on the part of some large Chinese solar firms such as Suntech. And there was a collective sigh of relief on the part of developers of solar panels in the U.S., who feared large duties would undermine the surging growth in solar projects by sharply increasing global prices or triggering a trade war.

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“I’m relieved the tariffs are as modest as they are,” said Tony Clifford, chief executive of Standard Solar, a solar developer and installer in Rockville, Md. He said he buys a majority of his panels from Chinese makers. But referring to the anti-dumping case, Clifford added, “We’re still waiting for the other shoe to drop.”

Commerce Department officials said they had notified their Chinese counterparts Tuesday of the preliminary decision. China controls about 50% of the U.S. market for solar panels. The officials said Chinese imports of solar panels totaled $3.1 billion last year, up from $640 million in 2009.

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