WASHINGTON (Reuters) - American solar panel makers asked the U.S. government on Wednesday to impose stiff duties on Chinese-made solar energy products that they said unfairly undercut prices and destroy thousands of American jobs.
The spat over solar panels, which comes even as the Obama administration faces criticism over its financial backing for bankrupt U.S. solar panel maker Solyndra, marks the latest irritant in relations between the world’s two top economies.
“Let us be clear. China has a plan for our market — to gut it and own it,” Gordon Brinser, president of SolarWorld Industries Americas Inc, told a news conference, as the U.S. solar panel makers asked the U.S. government to slap duties of more than 100 percent on more than $1.6 billion of Chinese-made solar cells and modules.
Flanked by Oregon’s two Democratic senators, Ron Wyden and Jeff Merkley, Brinser said Chinese solar energy product makers had received a long list of illegal government subsidies in China and sold at steep discounts to grab U.S. market share.
“American solar manufacturers can compete with any Chinese manufacturer, but not with the entire government of China,” Brinser said.
SolarWorld is the U.S. arm of SolarWorld AG, one of Germany’s largest solar product manufacturers which has sought to expand into the growing U.S. market. Last month, SolarWorld shut its Camarillo, California, production plant due to the steep drop in solar panel prices.
SolarWorld and six other U.S. solar energy product companies joined in a coalition to ask the U.S. government to take action.
The controversy comes at a sensitive time in U.S.-Chinese trade relations. Earlier on Wednesday, China’s Commerce Ministry urged the United States not to “politicize” economic issues and said that legislation in the U.S. Congress aimed at pressing the Chinese to let the yuan currency rise more quickly violates international trade rules.
In addition, the United States pressed China to explain why its “national firewall” blocks so many U.S. companies from selling in China via the Internet, according to a letter obtained on Wednesday.
“Some companies based outside of China have faced challenges offering their services to Chinese customers when their websites are blocked by China’s national firewall,” U.S. Ambassador to the World Trade Organization Michael Punke said in the letter on Monday to his Chinese counterpart.
Next week, the House of Representatives Ways and Means Committee plans a hearing to examine a broad array of Chinese trade actions that are causing concern in the United States.
The U.S. solar companies said Chinese producers can aggressively undercut American prices because they receive massive cash grants and other subsidies in China such as tax breaks, discounted raw materials, discounted land, power and water, multibillion-dollar preferential loans, export assistance grants and preferential export insurance.
SolarWorld and its six partners are seeking anti-dumping duties of more than 100 percent to offset below-market Chinese pricing and additional countervailing duties against Chinese subsidies.
Brinser did not rule out the possibility of SolarWorld AG filing a similar case in Germany, but said the unit he led was focused on protecting the U.S. market
Timothy Brightbill, an attorney representing the U.S. solar companies, blamed Chinese pricing practices for seven U.S. solar plants cutting thousands of jobs or closing down in the past 18 months.
“The U.S. solar business is one of the few growth markets in this down economy, and the Chinese are using unfair and illegal tactics to exploit it at any and all costs,” he said.
Industries such as steel have relied on U.S. anti-dumping and countervailing duties to restrict foreign competition. But the new solar case appears to be the first time the renewable energy sector has turned to U.S. trade remedy laws.
The Obama administration did successfully challenge a number of Chinese subsidies to support its wind power producers in a World Trade Organization case initiated by the United Steelworkers union.
Petitions filed with the U.S. Commerce Department and International Trade Commission (ITC) start a yearlong investigation into the U.S. solar companies’ allegations.
Preliminary duties could be imposed by the United States in a matter of months if the Commerce Department accepts the petition within the next 20 days and the ITC decides there is a reasonable indication U.S. producers are being hurt.
Wyden acknowledged that the U.S. government supports the American solar industry. But he said that U.S. programs abide by World Trade Organization rules while China’s do not.
Last month, U.S. solar panel maker Solyndra filed for bankruptcy, burdened with $783 million in secured debt and squeezed by falling prices caused by an industry glut.
Republican lawmakers probing a $535 million federal loan guarantee to Solyndra said on Wednesday they will keep pressing the White House to release more internal emails about the failed California-based solar panel maker.
Its downfall has become a political embarrassment for the Obama administration, which had promoted the company as an example of how it planned to spur development in clean energy technology and provided a government guarantee on the $535 million loan that Solyndra has said it may not repay in full.
The coalition estimated that U.S. imports of solar cells and modules at more than $1.6 billion in the first eight months of this year, compared to about $1.2 billion last year and less than $50 million in 2006.
Additional reporting by Langi Chiang and Don Durfee in Beijing; Editing by Will Dunham