China Says U.S. Subsidies Violate Trade Rules

In the latest missive in an ongoing trade dispute between the U.S. and China over renewable energy issues, China has filed a complaint with the WTO over U.S. subsidies to clean energy projects. From Bloomberg:

The ministry identified programs supporting renewable power, including wind and solar, in California, New Jersey, Massachusetts, Ohio and California that violate World Trade Organization policies and trade treaties, according to a preliminary finding on the agency’s website today.

The finding comes a week after the U.S. Commerce Department announced tariffs as high as 250 percent on Chinese solar cells and is the latest salvo in a renewable-energy trade dispute, according to Theodore O’Neill, an analyst at Wunderlich Securities Inc. in New York.

“It’s a long, slow escalation of trade and currency wars as we race to the bottom,” O’Neill said today in an interview.
Chinese solar companies have criticized Commerce’s preliminary decision May 18 that they improperly benefit from government subsidies and sell solar cells below cost. At least four U.S. solar manufacturers filed for bankruptcy in the past year.

MarketWatch has more on the background of the dispute:

The U.S. Commerce Department last week announced a preliminary decision to impose 31% tariffs on several of China’s largest solar-panel companies that it had found guilty of dumping.

The Chinese government blasted the U.S. decision as “protectionist” and “unreasonable,” saying it provoked trade friction and would hurt both Chinese and U.S. companies as well as the clean energy sector.

The Ministry of Commerce didn’t say Thursday how it might respond to the U.S. trade violations it had uncovered.

Four Chinese solar companies plan to hold a news conference later Thursday to respond to the U.S. Commerce Department’s decision on tariffs, which followed U.S. antisubsidy tariffs of 3% to 5% on Chinese solar companies in March.

Read more about renewable energy in China, cooperation with the U.S. over environmental issues, and about U.S. trade with China, via CDT.