Beijing said the US had “ignored the facts” as it responded on Wednesday to US plans to impose additional import duties of up to 35.2 per cent on Chinese-made solar panels in an escalation of the trade war in the industry that began in 2012.

The US department of commerce announced on Tuesday that following an investigation it had made a preliminary finding that photovoltaic solar components imported from China were being subsidised in a way that damaged US-based manufacturers.

It proposed duties at much higher rates than a first round announced in March 2012 and with a broader scope, covering both assembled solar panels and the cells used to make them. The duties initially covered only solar cells.

But in an angry response, China’s ministry of commerce said the US had “ignored the facts” and accused Washington of using trade rules to protect its own industry. Such use of trade measures “would not solve the development problems of the US solar industry, it added in a statement posted on its website

The US commerce department investigation followed a complaint from SolarWorld, a German-owned company that owns a solar panel factory in Oregon.

It had argued that Chinese exporters were getting round the earlier tariffs by outsourcing the manufacture of cells to other countries, particularly Taiwan, and then assembling them into panels in China.

Mukesh Dulani, president of SolarWorld America, described the decision as “a strong win for the US solar industry”.

However, the Coalition for Affordable Solar Energy, which represents the users of imported panels, said it was “deeply disappointed” by the decision, which was “a major setback for the entire US solar industry”.

Generators and installers that use imported panels warn that duties would make solar power in the US more expensive and slow its expansion at a time when it is becoming increasingly competitive with fossil fuels.

The cost of solar power has plunged in recent years as a result of a global glut of panels fuelled by steep increases in production in China.

The rates of the new tariffs vary for products from different Chinese companies: 18.6 per cent for Trina Solar, 35.2 per cent for Suntech Power and 26.9 per cent for all other Chinese manufacturers and exporters.

They apply to products not already affected by the first round of duties, which would include panels assembled from cells made in Taiwan.

The duties are scheduled to be confirmed by the commerce department on or around August 18, and will then be reviewed for 45 days by the US International Trade Commission until a final decision is made around October 3.

The commerce department is also expected to announce additional anti-dumping duties on Chinese solar panels on July 25.

However, US Customs will immediately start collecting cash deposits on imports based on the duty rates, to be repaid if the tariffs are not confirmed.

By Ed Crooks, June 4, 2014 in Financial Times