July 18, 2013 / 10:46 AM / 7 years ago

China hits U.S., South Korea with solar material duties, skirts EU decision

BEIJING (Reuters) - China’s Commerce Ministry issued preliminary anti-dumping duties on imports of U.S. and South Korean solar-grade polysilicon on Thursday, but made no decision on tariffs on European Union exports of the raw material used to make solar panels.

An employee dries newly made solar panels at a factory of a photovoltaic company in Jiaxing, Zhejiang province June 5, 2013. REUTERS/William Hong

Beijing’s move, a widely expected hit on U.S. and South Korean producers, coincides with difficult talks between the EU and China to defuse a conflict over alleged dumping of Chinese solar panels in Europe.

That spat, according to EU officials, pushed Beijing to threaten duties on European wine exports and risks sparking a trade war in other goods, including steel.

“Though the investigation into ... imported EU solar-grade polysilcion is still pending, the cause-and-effect relationship between the dumping of products from the United States and South Korea and harm to China’s domestic industry cannot be denied,” the Commerce Ministry said in a statement on its website.

The European Commission, the EU’s executive body, accused China of dumping billions of euros of solar panels in Europe below production costs.

In early June, it imposed punitive tariffs at 11.8 percent for two months, instead of an earlier plan for an immediate levy averaging 47 percent, leaving a window for Brussels and Beijing to negotiate.

The German Economy Ministry this month said Beijing would levy no duties on EU polysilicon following work to reduce trade tensions over EU tariffs on Chinese solar exports.

But last October, the United States leveled steep final duties on Chinese-made solar products, a move Beijing warned would provoke greater trade frictions in the new energy sector.

Thursday’s decision slapped hefty duties of 53.3 to 57 percent on U.S. polysilicon and duties on South Korean exports ranging from 2.4 percent to 48.7 percent.

U.S. subsidiaries of Renewable Energy Corp ASA were among those hardest hit.

Importers are required to pay preliminary duties in deposits starting from July 24, the ministry said.

Western solar firms have been facing off with their Chinese counterparts for years, alleging they receive government support and low interest rates to offer modules at cheaper prices.

The Commerce Ministry had merged its anti-dumping and anti-subsidy investigations into the three markets last fall, but some experts have said that the desire to reach a negotiated solution to the China-EU spat had delayed a decision on polysilicon duties.

Thursday’s ruling made no determination on anti-subsidy duties.

Some Chinese panel makers like Yingli Green have warned against the duties because they would raise production costs.

More than 80 percent of the polysilicon used by Chinese panel makers in 2012 was supplied by the United States, Europe and South Korea.

Reporting by Michael Martina; Editing by Ron Popeski

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