The United States on Wednesday slapped steep final duties on billions of dollars of solar energy products from China, but turned down a request from lawmakers and U.S. manufacturers to expand the scope of its order.
China's government and its solar manufacturers criticized the decision, adding more heat to the U.S.-China trade relationship following a congressional panel report on Monday urging American companies not to do business with two Chinese telecommunications companies because of security concerns.
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"The United States is provoking trade friction in the new energy sector, and sending a negative signal to the world that stirs global trade protectionism and obstructs the sector's development," said China's Commerce Ministry spokesman Shen Danyang.
Shen called on Washington to "correct its mistaken ways" and warned that the duties would harm U.S. exporters and customers.
The U.S. Commerce Department said Chinese companies were "dumping" solar cells and panels in the United States at prices 18.32 percent to 249.96 percent below fair value, although some individual companies received lower anti-dumping duty rates than in a preliminary decision earlier this year.
The department also set additional countervailing duties ranging from 14.78 to 15.97 percent to combat Chinese government subsidies, significantly higher than preliminary levels.
The United States imported about $3.1 billion worth of solar cells and panels from China in 2011, although that figure contains some products not covered by the investigation.
In a related decision that disappointed U.S. producers and cheered U.S. companies that install solar panels, the department turned down pleas to expand the scope of its order to include Chinese panels (or modules) made with non-Chinese solar cells.
Timothy Brightbill, outside attorney for SolarWorld Industries Americas, the driving force behind the U.S. case, said the company would continue to aggressively pursue that issue in the hopes of a more favorable ruling.
"In our view, all Chinese cells and all Chinese modules are dumped and subsidized," Brightbill said
SolarWorld is worried the department's current stance on the issue will encourage Chinese solar panel producers to move cell production to nearby countries to avoid U.S. duties, he said.
But Jigar Shah, president of the Coalition for Affordable Solar Energy, which includes Chinese and U.S. companies that oppose SolarWorld's case, said including panels with non-Chinese cells in the order would have "created a lot more chaos."
The Commerce Department's decision not to expand the scope is a "silver lining" to an otherwise disappointing decision on duties, Shah said.
The United States also has slapped preliminary duties on wind turbine towers from China and is expected to launch a new probe next week into charges that imports of Chinese hardwood plywood are unfairly priced and subsidized.
"We have the most squabbles with our biggest trading partners," said Scott Miller, a trade policy specialist with the Center for Strategic and International Studies, explaining the steady stream of U.S.-China trade spats.
In the solar sector, producers in the United States and Europe complain China's rapid expansion of solar panel manufacturing has created massive oversupply, erasing profits and sending company share prices into a tailspin.
SolarWorld's German parent has also been behind a charge in Europe for duties on Chinese solar panel imports.
China has already struck back by launching an investigation into imports of solar-grade polysilicon from both the United States and South Korea.
Chinese manufacturer Suntech Power Holdings Co Ltd on Wednesday was hit with a final anti-dumping duty of 31.73 percent and a countervailing duty of 14.78 percent.
However, combined duty rates for Suntech and other companies will be reduced by about 10.54 percentage points to avoid "double-counting" of Chinese export subsidies in the anti-dumping and countervailing duty rates.
Trina Solar Ltd received a final 18.32 percent anti-dumping duty and a 15.97 percent countervailing duty. Well over a hundred companies were hit with a 25.96 percent anti-dumping duty and a 15.24 percent countervailing duty.
Trina said in a statement that it was waiting for a decision from the U.S. International Trade Commission, a separate U.S. government agency, which must give its approval for the duties to take force, before deciding whether to appeal.
The ITC vote is expected in early November. Importers have been, however, required to post bonds or cash deposits based on the preliminary rates.
The Commerce Department also set a China-wide anti-dumping rate of 249.96 percent for other Chinese producers and exporters.
The Obama administration has heavily backed solar and other renewable energy since taking office, pledging about $16 billion for 26 projects through its clean energy loan program.
Republican presidential challenger Mitt Romney has criticized the support, saying the federal government should not be in the business of picking winners and losers.
(Additional reporting by Nichola Groom in Los Angeles and Michael Martina in Beijing; Editing by Bob Burgdorfer, Phil Berlowitz and Edwina Gibbs)