U.S. sets new tariffs on Chinese solar imports

(Reuters) - The United States hit Chinese solar companies with punitive import tariffs of 30 percent or more on Thursday, ruling they had dumped cut-price solar panels on the U.S. market.

In the latest in a series of trade disputes between Beijing and Washington, the U.S. Commerce Department said it had sided with U.S.-based solar companies that had complained a wave of Chinese imports had wrongly undercut their pricing and forced several renewable players out of business.

The size of the tariffs is larger than Chinese companies had expected and some analysts said it might prompt them to manufacture elsewhere or look for alternative markets.

It may also trigger retaliation by China.

Washington on Thursday set tariffs on shipments from most of the top Chinese exporters, including Suntech Power Holdings Co Ltd and Trina Solar Ltd, at about 31 percent.

Several Chinese firms and a solar trade group opposed to the tariffs said it would push up costs for the clean energy source.

The ruling stems from a complaint filed last October by the U.S. subsidiary of Germany's SolarWorld AG, and six other U.S. companies that alleged unfair competition and had sought duties well above 100 percent.

China's solar companies hold over 60 percent of the global market. Their heavy reliance on subsidized U.S. and European markets has prompted criticism that loans from Chinese state-run banks and low prices gave the companies an unfair advantage.

Under the decision, 59 Chinese solar companies that petitioned Washington in the case will also face an import duty of about 31 percent, including Yingli Green Energy, LDK Solar, Canadian Solar, Hanwha solar One, JA Solar Holding and Jinko Solar.

Other Chinese companies could now face a 250 percent tariff, although those levels could be altered before the final ruling is issued from the Commerce Department in the coming months.

The U.S. ruling, retroactive to cover imports dating back 90 days, comes two months after Washington set more modest tariffs of less than 5 percent on imports from China because of what it deemed Beijing's unfair support for its solar industry.

Suntech, the world's largest manufacturer of solar panels, which also operates a panel plant in Arizona, denied it sold below its cost of production.

"All leading companies in the global solar industry want to see a trade war averted. We need more competition and innovation, not litigation," Andrew Beebe, Suntech's chief commercial officer, said in a statement.

Yingli Energy and Trina Solar said they would actively defend their position in administrative proceedings.

Shares of U.S.-based solar companies rose on the news, with First Solar Inc gaining 6.7 percent and Sunpower Corp gaining 10 percent. Sunpower Corp was already rallying after Apple Inc said it would use the company's solar panels for its solar farm.

U.S.-listed shares of Chinese solar companies dropped, particularly Yingli Green Energy, which slid 13 percent, while Suntech dropped 5.8 percent and Trina fell 7.9 percent.

TAIWAN SOLAR COMPANIES RALLY

It also lifted Taiwanese solar stocks on hope that solar cell and wafer suppliers there will fill the gap left by Chinese firms discouraged by the trade barriers, analysts said.

There was speculation that Chinese companies could circumvent the restrictions by buying Taiwan cells and wafers for panels and assembling them outside the mainland.

"This is positive for Taiwanese players which can come in and supply solar cells to U.S. panel makers that won't be buying from the Chinese," said Keith Li, analyst at CIMB Research.

Shares of Gintech Energy Corp rose nearly 6 percent, Neo Solar Power Corp gained 3.5 percent and Motech Industries climbed 3 percent.

But Chinese solar stocks in Hong Kong slumped. Wafer companies GCL-Poly Energy Holdings fell 8.3 percent, Solargiga Energy Holdings nearly 9 percent and Comtec Solar Systems Group 3.3 percent.

Chinese companies had been bracing for a punitive duty of 15 percent, analysts said. Some have already started to look for markets beyond Europe and the U.S.

"By late last year, we started shifting our focus away from the United States and into other growth markets like Japan," said Solargiga Energy chief financial officer Jason Chow.

"Japan has started offering attractive incentives for solar." The U.S. market accounted for more over 10 percent of Solargiga's sales in 2011.

SPARRING ON TRADE

President Barack Obama, running for re-election in November, has promised to crack down on what he said were unfair Chinese trade practices.

Chinese officials have threatened to impose trade duties on U.S. shipments of polysilicon, the key material used in solar panels, if the U.S. moved to penalize Chinese solar companies.

"The anti-dumping ruling increases the risk of retaliatory action by Chinese government on U.S. polysilicon imports into China," a Deutsche Bank analyst said in a report.

Solar panel prices have tumbled more than 50 percent since the beginning of 2011 amid a supply glut triggered by declining subsidies in Europe and rapid global growth in the production capacity of solar wafers, cells and panels.

(Reporting By Matt Daily in New York, Leonora Walet in Hong Kong; Additional reporting by; Braden Reddall in Houston, Ran Li in Beijing and Twinnie Siu in Hong Kong; Editing by Phil; Berlowitz, M.D. Golan and Jonathan Thatcher)

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