The Trump administration announced Monday that it would impose hefty tariffs on the cheap, imported panels that have driven the rapid expansion of solar power in the United States, a move that industry groups warned would slow the spread of renewable energy and cost thousands of jobs.
The tariffs come as President Trump has vowed to take a tough line against cheap foreign imports that he blames for undercutting American manufacturing industries. The administration also announced it would impose hefty tariffs on imported large residential washing machines. In both cases, inexpensive imports – mostly from China in the case of the solar panels – have undercut US manufacturers, administration officials said.
Imports from China have been a particular target of Trump’s rhetoric. The tariffs are the most concrete step that he has taken to put those words into action. They mark the start of what many analysts expect will be a series of tougher actions on trade by Trump in the coming months, especially against China, with whom the US has a huge trade deficit.
The administration also has taken moves against imports of Chinese-made steel and aluminum and is considering sweeping sanctions against China for allegedly stealing US intellectual property and forcing American companies to hand over technology secrets to do business in China.
Trump acted after the government’s International Trade Commission “found that US producers had been seriously injured by imports,” said US Trade Representative Robert Lighthizer. “The president’s action makes clear again that the Trump administration will always defend American workers, farmers, ranchers and businesses.”
But the move against imported solar panels also threatens some of the very types of jobs that Trump has vowed to protect. Companies that install solar panels will probably trim their workforces, industry analysts warned, as the tariff – which starts at 30% on the imported panels and gradually declines each year – threatens to substantially raise the price of solar power in the United States. Imposition of the tariffs drew protests from environmentalists, who said the move would set back efforts to combat global warming, and from the solar power industry.
The levies, said Abigail Ross Hopper, chief executive of the Solar Energy Industries Assn., “will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs.”
California, where the renewables industry has taken off, will be among the states hardest hit by the new levies.
The industry trade group estimates the tariffs on solar panels will cost 23,000 jobs nationwide within the year, and that billions of dollars in potential investment in solar power will evaporate because of them.
The move also drew protest from some Republicans who said it violated the party’s long-standing support for free trade.
“Here’s something Republicans used to understand: Tariffs are taxes on families,” said Sen. Ben Sasse (R-Neb.).
The case for tariffs was filed at the International Trade Commission by two American firms that say their businesses have been crushed by cheap imports from Asia and Europe, which by now account for more than 90% of the solar panels installed in the US
The trade commission voted last month 4-0 in favor of imposing tariffs. It said the action was needed to confront the near-extinction of an American industry.
The commission found that the cheap imported panels had played a major role in a boom in solar power. The tripling of solar capacity in the US was “spurred on by artificially low-priced solar cells and modules from China,” the commission said.
But the import boom also has contributed to more than two dozen US solar manufacturers closing since 2012.
Government incentives in China have enabled its solar panel makers to produce 61% of the world’s solar panels, the trade commission said. In 2005, China produced just 7%. Few analysts, however, beyond those hired by the firms that filed the trade petition, project the tariffs will revive the panel-manufacturing industry.
The companies that filed the complaint had pushed for far steeper tariffs than Trump ultimately imposed, aiming for a remedy that would have lifted the cost of imported panels from 35 cents per watt to 78 cents, which is around the cost of the American product. Under Trump’s plan, the initial 30% tariff would decline by 5 percentage points each year. The tariff would last for four years. The first 2.5 gigawatts of imported solar panels would be exempted from the tariff each year.
The tariffs on washing machines are even steeper than those on solar panels: Trump approved tariffs of up to 50% on imports of finished washers as well as on major parts that go into them, such as plastic tubs and metal drums.
The tariffs, set for three years, were sought by the appliance maker Whirlpool Corp., which operates washer plants in the United States and employs about 15,000 manufacturing workers.
The action targeted two Korean companies, Samsung and LG, which have made significant gains in US market share for residential washers in recent years. Both companies recently have moved to open assembly plants in the US, but the new tariffs on imported washer parts means that the machines will be more expensive for them to produce even on American soil.
Published in Daily Times, January 29th 2018.
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