US ruling on solar panels 'unreasonable'

China on Friday rejected a US anti-dumping ruling against Chinese solar power equipment, calling it "unfair" and "unreasonable", as Chinese manufacturers warned that possible higher tariffs might hurt efforts to promote clean energy.

Shen Danyang, spokesman for the Ministry of Commerce, condemned the US anti-dumping tariffs as trade protectionism.

"By deliberately provoking trade friction in the clean energy sector, the United States is sending the world a negative signal about trade protectionism," Shen said in a statement.

The two governments have pledged to cooperate in developing renewable energy but have accused each other of violating free-trade pledges by subsidizing their own manufacturers.

Thursday's preliminary ruling by the US Department of Commerce said Chinese producers sold solar cells and panels below fair price and hurt American producers. If that ruling is upheld, tariffs averaging 31 percent could be imposed on Chinese solar-panel imports.

Also on Friday, the Chinese Renewable Energy Industries Association said that China is requesting the US Department of Commerce to "recheck the facts and make the right decision" without being affected by the US election.

Top Chinese exporters, including Suntech Power Holdings and Trina Solar, were punished with tariffs of about 31 percent.

Other Chinese solar companies will face import duties from 31 percent to 250 percent, although the levels could be changed before the final ruling from the commerce department in October.

According to the US Department of Commerce, imports of solar cells from China in 2011 were valued at an estimated $3.1 billion.

"Chinese companies will lose their price advantage compared with US companies with the high import taxes," said Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance.

The US decision to impose import duties on Chinese solar panels will raise their price to $1.11 per watt, according to calculations by Bloomberg New Energy Finance.

That price is 17 percent higher than the current spot price of non-Chinese panels, said the research.

There is also worry whether Europe will follow the US, Gao said.

The European Union is considering whether to launch an anti-dumping and anti-subsidy investigation into imports of Chinese photovoltaic solar panels.

"If Europe proposes an investigation, Chinese companies will suffer a lot," Gao said.

China exports more than 90 percent of its photovoltaic solar cells to the US and European markets.

The new ruling stems from a complaint filed in October by the US subsidiary of Germany's SolarWorld and six other US companies that alleged Chinese companies received illegal government subsidies and dumped products in the US market.

Other industry players in the US, however, disagree with SolarWorld's allegation and say the decision will backfire.

"It is our feeling that given the current climate in the United States, blocking Chinese companies from the US will simply shift imports from other places" such as Malaysia and India, said Jigar Shah, president of the Coalition for Affordable Solar Energy, a group of US and Chinese firms that promotes free trade and opposes trade protectionism in the solar power industry.

"We intend to strongly defend with data our position that these duties are unwarranted and serve as an impediment to the broader adoption of solar energy in a time of rising fuel costs," said Mark Kingsley, chief commercial officer of Trina Solar.

Chinese solar equipment manufacturers warned earlier that sanctions could result in a loss of American jobs because US companies are both buyers of Chinese products and suppliers of materials. They said Chinese manufacturers spend some $2 billion a year to buy materials such as polysilicon from US suppliers.

Kingsley said Trina buys silicon from Michigan and manufacturing equipment from New Hampshire, plastic and glass from Japan and South Korea and other components from suppliers elsewhere in Asia.

"These products, by design, are incredibly international," he said. "The vast majority of this value chain is not in China."

He said the disputes will ultimately hurt consumers and businesses throughout the solar value chain.

With the presidential election drawing near, US President Barack Obama is getting tough on Chinese exports. The US announced it would set up a cross-agency trade enforcement unit to crack down on unfair practices of its trade partners, including China.