The World Trade Organization (WTO) has ruled in favor of the United States in a disagreement with China over solar panel imports.

A system of tariffs and a quota was imposed by the US in 2018 after producers of cells for the renewable technology equipment argued that cheap imports from Asia were harming their business.

In particular, a trade suit filed in 2017 by a bankrupt US manufacturer of crystalline silicon photovoltaic cells claimed imports had increased to such an extent that the domestic industry risked serious harm.

Then-president Donald Trump responded by putting in place annual reductions in the duty rates from an initial 30 per cent for four years, before extending this by a further two years just before he left office in early 2021.

China launched a complaint with the WTO, contesting the measures on the grounds that the US had not established a significant causal link between harm to the industry and the increase in solar panel imports.

However, a panel has now rejected China's claims, denying that the measures breached global trade rules and finding in favor of the US. This is the first time a general safeguard action has been successfully defended in front of a WTO dispute panel.

US trade representative Katherine Tai said in a statement: "I welcome the WTO panel's findings rejecting China's challenges to the US solar safeguard as baseless."

The dispute settlement body will now adopt the panel's report within 60 days unless China decides to appeal.