By Krista Hughes
WASHINGTON (Reuters) - The United States on Tuesday confirmed steep import duties on solar products from China and Taiwan, in a decision that could inflame trade tensions between the two countries.
Anti-dumping duties for Chinese goods were set as high as 165.04 percent as the U.S. arm of German solar manufacturer SolarWorld AG (SWVKk.DE) seeks to close a loophole that let Chinese producers sidestep duties imposed in 2012.
Taiwan producers face anti-dumping duties as high as 27.55 percent, according to the final Commerce decision, which SolarWorld said raised average duties for Chinese producers but cut them for Taiwan. Producers in China face separate anti-subsidy duties.
"These remedies come just in time to enable the domestic industry to return to conditions of fair trade," said SolarWorld Industries America President Mukesh Dulani.
The move is set to deal a heavy blow to China and Taiwan's solar panel shipment to the U.S. market, Chinese solar industry officials say.
Shares of Chinese solar panel manufacturers, such as Hareon Solar <600401.SS> and Shunfeng International <1165.HK>, fell more than 2 percent on Wednesday, underperforming broader markets.
Readying for the decision, some Chinese firms have been preparing to set up factories overseas to sidestep the duties.
"In the next few months, we are expected to see some changes in the industry. Some companies will set up plants in southeast Asia or south America," said Jessica Jin, solar analyst at IHS in Shanghai.
The U.S. decision, which will affect companies including China's Trina Solar Ltd (TSL.N) and Suntech Power (STPFQ.PK) and Taiwan's Motech Industries Inc <6244.TWO>, may sour the mood at annual U.S.-China trade talks in Chicago, which started on Tuesday.
China's Commerce Ministry expressed "serious concern" on Wednesday and vowed to protect its interests in the WTO framework and the U.S. judicial system.
"This abuses trade remedy measures, damages the legitimate rights of Chinese companies and violates the United States' duty to respect World Trade Organization rules," an unnamed official said in a statement posted on the ministry's website.
In August, China suspended imports of polysilicon, a raw material used in solar panels, in response to surging imports.
The Solar Energy Industries Association, which represents makers and installers of solar panels, said it would continue working for a negotiated solution. "It's time to end this costly dispute," said President Rhone Resch.
Solar manufacturers have recovered over the last two years from a battering caused by an influx of products from China and a cut in European subsidies.
U.S. imports of solar products from China were worth $1.5 billion in 2013, half the 2011 level, while imports from Taiwan more than doubled to $657 million, Commerce data show.
Many solar panel installers have warned the duties will push up prices. The duties must still be confirmed by the U.S. International Trade Commission, which will make its final decision by Jan. 29.
(Additional reporting by Nichola Groom in Los Angeles, Charlie Zhu in Hong Kong and Michael Martina in Beijing; Editing by Lisa Shumaker, Kenneth Maxwell and Clarence Fernandez)