China to US: End support for clean energy or face penalties

The world’s two largest economies are involved in another fiery dispute over trade. China’s Commerce Ministry says the U.S. must cut support for six government-backed renewable energy programs or face unspecified penalties.

According to China’s trade ministry website, the U.S. measures supporting wind, solar and hydroelectric energy programs present a barrier to Chinese exports. These programs are in effect in several U.S. states, including Massachusetts, Ohio and New Jersey.

The announcement comes as Beijing and Washington fight over duties on solar and wind energy projects. The announcement is also the final ruling in an investigation which was launched in November.

“The Commerce Ministry will adopt relevant legal measures, demands that the United States cancel parts of the measures that violate World Trade Organization rules and give Chinese renewable energy firms fair treatment,” the ministry said.

According to Reuters, Western solar companies have had disputes with their Chinese counterparts for years. They accuse U.S. firms of receiving lavish credit lines to offer modules at cheaper prices — ultimately squeezing out Chinese competition.

In May, the U.S. imposed duties of about 31 percent on solar panel imports from China. It also hit Beijing last month with a second round of duties on wind turbine towers from China.

Last month, Chinese solar companies warned of a trade war. This came after European firms, led by Germany’s SolarWorld, asked the EU to investigate complaints that Chinese rivals had been selling their products below market value in Europe.

Reporting by Reuters. Photo by Ethan Kan