The U.S. Sets New Tariffs on Chinese Solar Imports

U.S.-listed shares of Chinese solar companies dipped, particularly Yingli Green Energy (YGE.N), which was off 13 percent, while Suntech dropped 5.8 percent and Trina fell 7.9 percent.

Sparrin on Trade

President Barack Obama, running for re-election in November, has promised to crack down on what he said were unfair Chinese trade practices. In March, Washington challenged China's export restrictions on critical "rare earth" industrial materials in a complaint, together with the European Union and Japan, to the World Trade Organization.

Chinese government officials have previously threatened to impose trade duties on U.S. shipments of polysilicon, the key material used in solar panels, if the U.S. moved to penalize Chinese solar companies.

Solar panel prices tumbled by more than 50 percent since the beginning of 2011 amid a glut of supplies triggered by declining subsidies in Europe and rapid global growth in the production capacity of solar wafers, cells and panels.

That steep solar price drop forced many companies in Europe and the United States into bankruptcy and decimated the once-lucrative margins across the industry.

Among those casualties was Solyndra, the California-based start-up that shuttered operations last year after taking more than $500 million in U.S. loans, prompting criticism that the Obama administration was favoring uncompetitive renewable power.

Morningstar Equity Research analyst Stephen Simko said new duties would not halt the drop in solar panel prices, predicting that the U.S. market will attract imports from Japan, Europe and even Chinese-owned factories in other countries.

"The United States is not a large enough portion of the market to alter those dynamics," he said.

The U.S. solar market doubled in size last year, but remains less than 10 percent of the overall global demand, and is likely to be overtaken this year by purchases in China for the first time.

Lawyers for SolarWorld have said Chinese exports of solar cells and modules swelled to $2.8 billion in 2011 from $1.2 billion in 2010, exceeding even the sharp growth that saw U.S. solar installations double last year.

Still, Chinese companies have not been immune to the pain. Market analysts have said many smaller, less competitive Chinese solar companies have closed, and share prices for Suntech, Yingli and Trina have plummeted by more than 75 percent over the past year.