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Experts warn of trade war on solar panels

By Ariel Tung in New York | China Daily | Updated: 2012-11-08 11:23

Even as the nation congratulates US President Barack Obama for his victory Tuesday night, energy experts warned about "an escalating trade war" between the United States and China over anti-dumping duties on Chinese solar imports.

On Wednesday, the US International Trade Commission determined that imports of crystalline silicon photovoltaic cells and modules from China have hurt the US solar panel industry. The decision paves the way for the US Commerce Department to impose tariffs of up to 36 percent on Chinese solar panels.

In October, the Commerce Department concluded that Chinese companies, using government subsidies, were able to sell solar panels in the US cheaper than what it costs to manufacture them.

China's Ministry of Commerce has called on the US to drop the trade case.

Ministry spokesman Shen Danyan said that the US should be supporting closer cooperation between the two nations.

Edward Barbier, an economics professor at the University of Wyoming, believes that the duties on Chinese solar imports may stand in the way of US-China cooperation on renewable energy and environmental issues.

The tariffs could "precipitate a clean energy trade war with China" because it could retaliate with tariffs on other clean energy imports, such as wind turbines, solar batteries and biofuels, Barbier said.

The solar tariffs could undermine broader US-China cooperation on climate change and other important issues, he added. Considering that economic ties between the two have been far from smooth in recent years, the two largest economies may have less of an incentive to pursue other interests, such as reducing greenhouse gas emissions.

"China is already investigating US polysilicon and today's announcement could compel the Chinese government to further retaliate against US exports or to file a new World Trade Organization case against the US' own green subsidies," said Scott Lincicome, an international trae attorney with White & Case. Lincicome is the author of a recent report for the Cato Institute about the US policy on countervailing duties.

"These duties, litigation and uncertainties are precisely what the struggling solar industry-in the US, China and elsewhere-doesn't need," he said.

Aaron Chew, a renewable energy analyst at the Maxim Group, a New York investment bank and asset management company, said that the solar industry will hurt most from a trade war between China and the US.

"Whether it is modules makers or installers of solar panels in the US, Europe or China, obviously you don't want a trade war," Chew said. "Ultimately, solar has to get its price down. This trade war is going to stop the progress for solar."

The solar tariffs are "a bad idea" because the only way for the US and China to minimize trade tensions is to have a more constructive dialogue," said Tom Gutierrez, CEO of GT Advanced Technologies.


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