US affirms steep tariffs on China solar panels

WASHINGTON — The Obama administration upheld steep tariffs on Chinese solar panels Wednesday, finding that improper trade practices have undermined an American solar industry that the largest US manufacturer says is in the midst of collapse.

In one of the largest trade cases the United States has pursued against the Asian superpower, the Commerce Department said China’s government is subsidizing companies that are flooding the US market with low-cost products — a tactic known as ‘‘dumping.’’ To counteract those price cuts, the US government imposed tariffs ranging from 18 percent to nearly 250 percent.

For some Chinese companies, those tariffs are slightly lower than preliminary tariffs imposed in May.


Still, another set of duties dealing with improper subsidies was increased dramatically. While the initial ruling levied antisubsidy fees ranging from 2.9 percent to 4.7 percent, the final ruling issued Wednesday sets those fees at 14.8 percent to 16 percent.

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In a blow to US companies requesting the tariffs, the government declined to expand the scope of the case to cover products partially produced outside of China.

The tariffs could aggravate already strained trade relations between the United States and China. Solar companies in both countries are suffering from a lack of global demand for their products, even as President Obama looks to renewable energy to create jobs and reduce American dependence on oil.

Scrutiny of the US solar industry has been magnified by Republican indignation over Solyndra Inc., a California-based solar panel maker that won a half-billion-dollar loan from the Obama administration and then went bankrupt. Solyndra is not involved in the trade case, but it cited Chinese competition as a prime reason it flopped.

The longstanding solar panel dispute with China also has reverberations in the presidential race, where Republican Mitt Romney has both criticized Obama for subsidizing green energy sources and faulted him for a failure to stand up to China’s trade and currency policies. Romney has vowed to crack down on China as part of a more assertive foreign policy in Asia and elsewhere.


The Commerce Department ruling is the penultimate step in a sweeping trade case launched in 2011. For the tariffs to stand, the US International Trade Commission must declare that China’s exports have materially injured the US solar industry.

A vote on that issue is set for Nov. 7, the day after Election Day. In its initial, unanimous vote in December 2011, the ITC said there was reason to believe Chinese imports were harming US manufacturers.

A group of US companies led by Oregon-based SolarWorld, the largest US maker of silicon solar cells and panels, asked the government to penalize China, claiming unfair trade policies are delivering a one-two punch to the US solar industry. First, the companies argue, China is improperly subsidizing its own companies to prop them up. Next, Chinese manufacturers are dumping their products on the US market below cost, absorbing a short-term loss in hopes of putting their US competitors out of business, the companies claim.

After the Commerce Department imposed preliminary tariffs in May, US manufacturers said the Chinese companies exploited a loophole by outsourcing part of the production to other countries, thereby skirting the new tariffs. Commerce declined to close that loophole Wednesday by expanding the case to cover such products.

Many US solar panel installers oppose the tariffs and say low-cost imports are making solar technology affordable for US consumers. A group of companies, including China-based Suntech Power Holdings Co., has fought the complaint, arguing that US companies are blaming China for their own failures — such as failing to adapt their products to the needs of utility companies.


Both sides claim that a victory for their opponent will cost thousands of American jobs.