A change in how imported solar panels are classified may impose up to $70 million in unexpected tariffs. As reported Wednesday by the New York Times:

The issue began with a short letter to United States customs officials last December from the small American subsidiary of a Spanish energy company. The subsidiary, GES USA, wanted to know what the tariff would be to import certain solar panels from China.

On Jan. 9, the customs agency wrote back that the panels had become too sophisticated to qualify for duty-free import. Instead — because the panels contain a basic electronic device for safety and energy efficiency — they would be treated as electric generators, subject to a duty of 2.5 percent.

While a 2.5-percent hike is relatively small potatoes, the change could have a number of implications:

(1) American consumers looking to install imported panels would likely face higher prices. Given that about half the panels purchased in the U.S. are manufactured elsewhere, the overall effect could be significant.

(2) Already facing stiff competition and razor-thin margins, companies that import solar panels to the U.S. would face added pressures. A number of foreign panel makers, like China’s Suntech, have plans to open facilities in the U.S. Others, like Germany’s SolarWorld, have already done so. With U.S.-based operations, such companies would presumably avoid the added import duty.

(3) While the new classification would apply to all panel imports, regardless of origin, it would hold particular significance for China, which exports to the U.S. nearly five times as much (in dollar value) than it imports from the U.S.

Several weeks ago, the Obama Administration announced a 35-percent tariff — a so-called “safeguard” measure — on low-end car tires imported from China. In response, China declared it would initiate dumping and subsidy inquiries into U.S. imports of car parts and chicken products, alleging illegal behavior on the part of the related U.S. industries. The tire rate hike may be largely symbolic in effect — but it risks aggravating bilateral relations between America and China, arguably the world’s most important economies.

The new classification for imported solar panels may add further aggravation. American manufacturers of renewable-energy equipment have already voiced concerns about market access in China. Depending on the Chinese response, these concerns may become more acute: American firms may face similar tariff increases in Chinese markets (not to mention elsewhere).

This is just the latest trade-related chapter in China’s solar story. In late September, Suntech’s CEO took flak for suggesting that his firm was selling its panels below marginal cost — that they were, in effect, dumping their product in foreign markets, a practice that is subject to punitive counter-measures under World Trade Organization rules. (He later backtracked.) For further reading, see Connie’s recent posts here and here on Germany’s and China’s unique relationship. Both export-dependent economies, the two have recently butted heads over trade- and technology-related policies.

Large economies often disagree on trade, especially when it comes to emerging sectors deemed to have strategic importance and economic potential. Let’s hope such disagreements don’t interfere with overall growth in the solar market — nor in the development and deployment of high-quality solar projects.