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Solar shares leap as US-China trade war escalates

The U.S. Commerce Department announced a new set of duties on Chinese solar products Wednesday, sending American solar stocks like First Solar and SunPower skyrocketing, and China-based Trina Solar and JinkoSolar falling.

The new duties were in response to a petition from SolarWorld, a German solar manufacturer with major operations in the U.S., which sought to eliminate a loophole whereby Beijing-subsidized solar manufacturers avoided previous U.S. rulings by making key parts in Taiwan. SolarWorld argued that those subsidies significantly hurt the U.S. solar manufacturing sector.

Employees work on a solar panel production line at Shenzhou New Energy Co., Ltd on August 27, 2012 in Lianyungang, China.
ChinaFotoPress | Getty Images
Employees work on a solar panel production line at Shenzhou New Energy Co., Ltd on August 27, 2012 in Lianyungang, China.

"The government-underwritten Chinese solar industry has decimated much of the solar manufacturing industry on several continents, including the Americas," Ben Santarris, strategic affairs director for SolarWorld America, wrote in an email to CNBC last month. "Many U.S. companies have shut down production, costing the jobs of hundreds of Americans."

The Commerce Department's preliminary determination set duties of 35.21 percent on imports of some Wuxi Suntech Power products, 18.56 percent on Trina Solar products and 26.89 percent on other Chinese manufacturers.

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"The import duties, which are in line with our expectations, will wipe out the price competitiveness of Chinese products in the U.S. market," Zhou Ziguang, analyst at Chinese investment bank Ping An Securities in Beijing, told Reuters.

Chinese companies, however, are not the only ones to decry SolarWorld's petition for more tariffs. A U.S.-based organization called Coalition for Affordable Solar Energy (CASE) sprang up in opposition to SolarWorld. The group comprises more than 90 companies "united in the belief that SolarWorld's actions will kill jobs in the U.S. economy while raising the price of solar energy," according to its website.

Many of those companies will suffer with tariffs on Chinese manufacturers, George Hershman, a division manager for CASE-member Swinerton Renewable Energy, told CNBC last month. He said his group does not support a legal petition on Chinese trade practices when other steps could be taken that won't damage other sectors of the U.S. solar economy.

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"We just think that handling this through the Department of Commerce is a broad-reaching approach to an issue," he told CNBC. "The industry ... recognizes that a settlement is a better solution."

Click here for more on the SolarWorld-CASE disagreement.

CASE released a statement on Wednesday saying it is "deeply disappointed" in the Commerce Department's ruling.

—By CNBC's Everett Rosenfeld, with reporting by Reuters

Energy

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