U.S. tariff increases on Chinese solar panels may spark trade war

The U.S. is contemplating an increase of up to 31 per cent in the tariffs slapped on Chinese solar panels. The U.S. maintains that China is dumping the panels at below market prices.

Three major Chinese manufacturers have rejected the U.S allegations. Shen Danyang a spokesperson for the Commerce Ministry said:"This is not consistent with China's development status, does not conform to the facts of China as a market economy and highlights the tendency of trade protectionism in the United States,"

The Obama government has itself subsidized the energy industry. See this article which points out:: "An investigation has revealed that the White House approved billions of dollars in federal funding for clean-energy firms. It also happens that nearly two-dozen of those companies have close ties with the president’s own cabinet."

The U.S. and China are cooperating on a clean energy drive and the Chinese says this action put that cooperation at risk. Both countries are promoting their own companies to generate jobs. Demand has weakened in Europe and this has increased competition from China.

U.S. solar panel manufacturers had asked the U.S. government to penalize the Chinese accusing it of selling below market prices. Even though U.S. manufacturer Solyndra received over half a billion in loans from the U.S. government it went bankrupt.

U.S. solar panel installers are upset by the government move as it will make the panels more expensive and likely reduce demand. The installers point out the Chinese make solar panels more affordable. Both China and the U.S. accuse each other of violating free trade pledges by subsidies to their own manufacturers. Both are probably correct! For more see this article.

"