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The U.S. Commerce Department announced a preliminary decision Tuesday to impose modest import duties on Chinese solar panels of below 5%, while continuing its probe into allegations by struggling U.S. producers that they are the victims of unfair competition.
In the high-profile case, Commerce backed claims made last October by the U.S. unit of Germany-based SolarWorld (SWV.XE) and six other U.S. firms that Chinese solar-panel suppliers had received unfair government subsidies. However, the department proposed relatively low countervailing duties of between 2.90% and 4.73% on the Chinese imports.
Still, the U.S. is also investigating allegations that the solar panels and solar cells are being dumped, or sold at less than normal value, with an initial announcement on antidumping duties expected soon.
Commerce expects to make a final decision on the countervailing duties in June. Before the duties can take effect, the International Trade Commission would have to find that U.S. producers are being harmed by the imports. The independent government panel is expected to vote in July.
The case has exacerbated trade frictions with Beijing, while dividing the U.S. solar-power market at a time when solar-panel makers have been struggling with plunging prices amid an oversupply of panels, primarily from China. Imports of the panels from China more than doubled in value last year to $3.12 billion.
President Barack Obama is also taking heat from Republican rivals for the upcoming elections for his policies to counter Chinese competition and for his clean-energy policies, under which solar-panel maker Solyndra LLC received more than $500 million in federal loans before filing for bankruptcy. The president plans to visit a Sempra Energy (SRE) solar-power plant in Nevada on Wednesday as part of a trip focused on energy.
China's Ministry of Commerce has criticized the U.S. investigation as an example of "protectionism," while Chinese solar-panel makers and some of their U.S. clients have warned that antidumping tariffs could result in financial losses for some U.S. consumers and job losses for workers in the industry.
Suntech Power Holdings Co. Ltd. (STP, K3ND.SG), Yingli Green Energy Holding Co. Ltd. (YGE) and other large Chinese solar-panel makers have denied dumping panels in the U.S., and have also denied accusations they received unfair government subsidies.
-By Tom Barkley and Cassandra Sweet, Dow Jones Newswires; 202-862-9275; firstname.lastname@example.org