The Ministry of Commerce said on Monday that the United States should reduce aid in six renewable energy programs supported by the government or face unspecified sanctions on the last trade dispute between the two largest economies in the world.
The announcement culminates an investigation that began in November, comes as a dispute between Beijing and Washington over tariffs on solar and wind energy. China’s call also comes amid a debate between U.S. presidential candidates on renewable energy subsidies.
“The Ministry of Commerce shall adopt relevant legal measures required to delete the parts U.S. measures that violate the rules of the World Trade Organization and to give Chinese companies renewable energy fair treatment,” the ministry said.
Western solar power firms have disagreed with their Chinese counterparts for years, charging that they receive lavish credit lines to offer modules at cheaper prices. In May U.S. imposed a tax of about 31% on imports of solar panels from China. China also hit last month with a second round of taxes on wind turbine towers from the Asian country.
The Chinese solar companies warned of a possible trade war last month, after European firms led by Germany’s SolarWorld asked the European Union to investigate allegations of Chinese rivals have been selling their goods below the value of market in Europe.
The U.S. president, Barack Obama, has accused the Republican candidate Mitt Romney to promote policies that hurt renewable energy, something that would have labor costs in politically important swing states ahead of the November elections. Romney, meanwhile, says that Obama has been firm in his decisions about China.