By Krista Hughes
WASHINGTON (Reuters) - The United States confirmed steep import duties on solar products from China and Taiwan on Tuesday in a decision which may inflame trade tensions between the two countries.
Anti-dumping duties for Chinese goods were set as high was 165.04 percent as the U.S. arm of German solar manufacturer SolarWorld AG (SWVKk.DE) seeks to close a loophole which allowed Chinese producers to sidestep duties imposed in 2012.
Taiwanese producers face anti-dumping duties as high as 27.55 percent, according to the final Commerce decision, which raised rates for some companies but lowered them for others. Producers in China face separate anti-subsidy duties.
The 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.
The handling of excess capacity in the solar industry is one issue on the agenda.
In August, China suspended imports of polysilicon, a raw material used in solar panels, in reaction to surging imports from the United States and other countries.
Solar manufacturers have recovered over the last two years from a battering caused by an influx of products from China and a reduction in European subsidies as solar markets in the United States, Japan and China have surged and producers went out of business or reduced output.
U.S. imports of solar products from China were worth $1.5 billion in 2013, half the level of 2011, while imports from Taiwan more than doubled to $657 million over the period, according to Commerce data.
Many solar panel installers, who benefit from cheap imports, have said the duties will hurt consumer demand for renewable energy by driving up prices and making green power less competitive with electricity generated by fossil fuels.
The duties must still be confirmed by the U.S. International Trade Commission. The ITC will make its final decision by Jan. 29.
(Additional reporting by Nicola Groom in Los Angeles)