The US Commerce Department announced a preliminary decision Thursday to impose tariffs of more than 31 percent on solar panels imported from China - another move by Washington that experts say could trigger a bilateral trade war.

The department said it would order duties of 31.22 percent and 31.14 percent, respectively, on products made by Wuxi-based Suntech Power Co Ltd and Changzhou's Trina Solar Energy Co. In addition, 59 other Chinese solar panel makers will be hit with a 31.18 percent duty while all other Chinese producers will face a whopping 250 percent import tariff.

Andrew Beebe, chief commercial officer at Suntech, the world's biggest producer of solar panels, said the decision creates "harmful trade barriers" between the US and China. His company will work closely with the Commerce Department before it acts in October to finalize the tariffs, Beebe said, to demonstrate why they're unjustified.

"These duties do not reflect the reality of a highly competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production," Beebe said in a statement.

According to the Commerce Department, imports of solar cells from China in 2011 were valued at an estimated $3.1 billion.

Thursday's preliminary decision was based on an "anti-dumping" investigation that followed a petition by German-owned SolarWorld Industries America Inc and six other undisclosed companies in November 2011. They accused Chinese solar panel makers of selling products in the US at less than fair value, bringing unfair competition and causing job losses in that market. The companies filed a similar complaint with the US International Trade Commission, which is conducting a separate investigation.

Other industry players in the US, however, disagree with SolarWorld's allegation and say the decision will backfire.

"It is our feeling that given the current climate in the United States, blocking Chinese companies from the US will simply shift imports from other places like Taiwan, Malaysia, India and other low-cost manufacturing markets," said Jigar Shah, president of the Coalition for Affordable Solar Energy (CASE), a group of US and Chinese firms that promotes free trade and opposes trade protectionism in the solar power industry.

Thursday's announcement is the latest in a series of moves by the US government in the industry. In March of this year, the Commerce Department imposed "anti-subsidy" tariffs of between 3 percent and 5 percent on imported Chinese solar panels, accusing producers of having received unfair subsidies from China's government.

Last November, 14 Chinese solar panel makers jointly rejected anti-dumping and anti-subsidy complaints filed by US manufacturers, calling on the Commerce Department to abandon "political and emotional interference" while scrutinizing Chinese solar companies.

Some industry experts argue that fears of job losses by US solar-gear companies are groundless. In fact, they say, providing entry to Chinese producers could help the sector by adding installation jobs.

Charles Gay, president of California-based Applied Materials' Applied Solar division and a 35-year industry veteran, said solar photovoltaics produce more jobs than other forms of energy generation, with installation jobs far exceeding those in module and component manufacturing.

"Any decision that slows global solar adoption, slows local job creation," said Gay, stressing that support work in financing, permitting and inspection are also local jobs.

Trina Solar buys equipment from the US and manufactures the final product at its Changzhou headquarters. According to its chief commercial officer, Mark Kingsley, one manufacturing job Trina has in Changzhou helps create as many as four installation jobs on US soil.

Ken Button, co-founder and president of Verengo Solar, the second-biggest residential solar provider in the US and a member of CASE, said his company has helped thousands of middle-class families save money during tough economic times by installing solar PV systems.

"Because our customers are very price-sensitive, today's decision to increase costs for solar cells and panels will make it harder for American families to access solar," Button said.

"Today, the US market has some of the highest solar panel prices in the world. The tariffs imposed were not helpful and will serve as a headwind to the US market," said CASE's Shah.

According to the trade group, most of the 100,000 jobs in the US solar industry are in sales, marketing, design, installation, engineering construction and maintenance of projects. These jobs often depend on availability of affordably priced solar panels, and companies would have to let workers go if panel prices rise as a result of the anti-dumping moves.

Others believe actions like the one announced Thursday are mistakes, possibly driven by political considerations as the US heads toward its presidential election in November. President Barack Obama's administration has drawn Republican fire over its handling of more than $500 million in loans to Solyndra LLC to help the now-bankrupt California company cope with the industry's manufacturing capacity glut and other problems.

"The US is currently in an election season and so the message of Chinese companies stealing American jobs is very much in vogue," said Shah.

"A terrible mistake - smacks of both protectionism and election-year China-bashing," said Jon Taylor, an associate professor of political science at the University of St Thomas in Texas.

yuweizhang@chinadailyusa.com

(China Daily 05/18/2012 page1)