UPDATE 5-US trade panel approves five-year duties on China solar products
* Solar dispute has strained trade relations with China
* Trade panel rejects making duties retroactive
* Importers urge U.S., China to negotiate solar trade deal
By Doug Palmer
WASHINGTON, Nov 7 (Reuters) - The United States gave final approval on Wednesday to duties on billions of dollars of solar-energy products from China for the next five years, protecting U.S. producers against lower-priced imports and raising fears of Chinese retaliation.
The U.S. International Trade Commission voted 6-0 in favor of double- and triple-digit duties in a case filed last year by SolarWorld Industries America.
Beijing has protested the case each step of the way, calling it a protectionist move that threatens the future of solar energy by driving up costs for consumers.
SolarWorld, the largest U.S. solar-panel manufacturer, accused Chinese competitors such as Suntech Power Holdings of selling solar cells and panels in the United States at unfairly low prices and receiving government subsidies.
SolarWorld's German parent, SolarWorld AG, is pressing the European Union for similar curbs on Chinese solar products.
Gordon Brinser, president of SolarWorld America, told reporters the unanimous vote showed "very clearly" that U.S. producers had been harmed the imports.
The duties should allow U.S. producers to start adding jobs, but stringent enforcement is needed to prevent Chinese companies from circumventing the orders, he said.
In the meantime, SolarWorld has invested $27 million over the past year in technology that is increasing the efficiency of its solar cells, Brinser said.
U.S. and European producers complain that China's rapid expansion of solar panel manufacturing has created a massive oversupply, destroying profits and crippling share prices.
The United States imported about $3.1 billion worth of solar cells and panels from China in 2011, up from $640 million two years earlier, although both figures contain some products not covered by the investigation.
The ITC vote clears the way for the U.S. Commerce Department to issue five-year anti-dumping and countervailing duty orders on those imports, based on rates announced last month.
Suntech, the world's largest producer of solar panels, was hit with combined Commerce Department duties of about 36 percent, while another major Chinese manufacturer, Trina Solar , faces duties of about 23.75 percent.
More than a hundred other Chinese producers and exporters face combined duties of about 31 percent and other Chinese firms combined duties of more than 250 percent.
"SolarWorld's hypocritical campaign has forced the fast-growing American solar industry to foot the bill for SolarWorld's competitive failures," Suntech America managing director E.L. McDaniel said in a statement.
U.S. companies that market and install Chinese solar panels also were disappointed by the vote and urged the U.S. and Chinese governments to negotiate a solar-energy trade deal that both sides can accept.
"Unilateral tariffs and a trade war in today's interconnected global marketplace are unnecessary and detrimental to effective and efficient business competition," Jigar Shah, president of the Coalition for Affordable Solar Energy, said in statement.
'PREPARING FOR THE FALLOUT'
China has already struck back by launching an investigation into imports of solar-grade polysilicon from both the United States and South Korea.
Beijing has also warned it could slap duties on polysilicon from the European Union and on Monday it began action at the World Trade Organization against Greek and Italian solar policies that it said unfairly favor domestic firms.
Tom Gutierrez, president of GT Advanced Technologies , whose company exports high-technology equipment used in the solar manufacturing to China, said he feared getting caught in the cross-fire in the case.
"If you punch someone in the nose, (the U.S. government) ought to have a backup plan for when they retaliate," Gutierrez said. "I'm preparing for the fallout."
Chinese firms have been required to post bonds or cash deposits based on preliminary duty rates since March in the subsidy part of the case and since May in the dumping part.
In a separate 4-2 vote on Wednesday, the ITC rejected the Commerce Department's finding of "critical circumstances," which would have made the duties retroactive to 90 days before the preliminary rates were announced.
Chinese manufacturer Yingli Green Energy said that decision saved it $13.7 million in duties it had on its books.
But "we are saddened to see the global ramifications of this case," the company's chief executive Liangsheng Miao said in a statement. "We are in the midst of a global trade war now, and Europe will be defending itself vigorously in the footsteps of the U.S. decision."