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The U.S. Commerce Department announced a preliminary decision Tuesday to impose modest import duties on Chinese solar panels of below 5%, while continuing its probe into allegations by struggling U.S. producers that they are the victims of unfair competition, according to the Wall Street Journal.

In the high-profile case, the Commerce Department backed claims made last October by the U.S. unit of Germany-based SolarWorld AG and six other U.S. firms that Chinese solar-panel suppliers had received unfair Chinese government subsidies.

However, the department proposed relatively low countervailing duties of between 2.90% and 4.73% on the Chinese imports. The companies had asked for duties on the Chinese products of as much as 100%.

The lower-than-expected duties sparked a stock rally among large Chinese solar-panel makers.

Both sides claimed victory in the Commerce Department’s decision Tuesday.

Steve Ostrenga, chief executive of Helios Solar Works was quoted saying in a statement that the US government’s decision confirms what US manufacturers have long known – that Chinese manufacturers have received unfair and WTO-illegal subsidies. Helios is one of the firms that filed the trade case with SolarWorld.

Opponents of the case also said they were pleased that the new duties are lower than expected.

The Commerce Department will impose countervailing duties of 2.9% on Suntech panels made in China.

The U.S. is also investigating allegations that the solar panels and solar cells are being dumped, or sold at less than normal value, with an initial announcement on antidumping duties expected soon.

The U.S. Commerce Department expects to make a final decision on the countervailing duties in June, the paper said. Before the duties can take effect, the International Trade Commission would have to find that U.S. producers are being harmed by the imports. The independent government panel is expected to vote in July, according to the paper.

China’s Ministry of Commerce has criticized the U.S. investigation as an example of “protectionism,” while Chinese solar-panel makers and some of their U.S. clients have warned that antidumping tariffs could result in financial losses for some U.S. consumers and job losses for workers in the industry.

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