Trump Says US ‘Will No Longer Tolerate’ Trade Abuses, as ITC Delivers Solar Tariff Report
Solar trade case petitioners hope the president will issue even stronger tariffs than the trade commission proposed.
The market outlook for solar projects in the U.S. now officially rests in the hands of President Donald Trump.
Last week, the U.S. International Trade Commission (ITC) published a report sent recently to the White House on the pending Section 201 investigation of crystalline silicon photovoltaic (CSPV) solar cells and modules. The 400-page document (volume I, volume II) describes three proposed trade remedies aimed at shoring up domestic solar PV manufacturing, which have not changed since they were first announced last month. It also lays out the reasoning for the ITC’s remedy recommendations.
Trade case petitioners Suniva and SolarWorld Americas were dismayed that the ITC’s remedy proposals were less severe than they requested. The highest tariff rate put forward by the commission would add roughly 6 cents per watt on imported solar cells and 10-15 cents per watt on modules, declining over four years. Petitioners asked the ITC to impose a tariff of 25 cents per watt on cells and 32 cents per watt on modules, plus a minimum import price for modules of 74 cents per watt, which would also decline modestly over the four-year tariff period.
While trade commissioners did not support Suniva and SolarWorld’s desired tariff rates, the companies were encouraged that the new ITC report portrayed an injured U.S. solar cell and module manufacturing industry in need of relief from foreign imports. The report cautions that without action, the domestic solar manufacturing industry “would likely cease to exist in the short term,” SolarWorld pointed out in a press release.
The report also states that “current CSPV cell and module technology is to a substantial degree a product of R&D and innovation in the United States, including by the petitioners,” adding that “the loss of the domestic industry, and the resulting reliance of downstream industries on foreign producers of (solar) products, could have significant long-term consequences for U.S. economic and national security interests.”
Recent statements from President Trump align with adopting protectionist trade measures to support U.S.-based manufacturers.
Speaking this month at the Asia-Pacific Economic Cooperation summit in Da Nang, Vietnam, the president accused certain countries in the region of “product dumping, subsidized goods, currency manipulation and predatory industrial policies,” CNBC reports.
“We can no longer tolerate these chronic trade abuses, and we will not tolerate them,” Trump said.
“From this day forward, we will compete on a fair and equal basis,” he added. “We are not going to let the United States be taken advantage of anymore. I am always going to put America first the same way that I expect all of you in this room to put your countries first.”
Though both foreign-owned, Suniva and SolarWorld, based in Georgia and Oregon, respectively, have decried the influence of foreign governments in the solar industry — especially China’s.
Acting on solar could have unintended consequences, however. Bloomberg reports that U.S. duties on imported solar equipment “would almost certainly” prompt retaliation from China, South Korea and other nations at the World Trade Organization (WTO).
China could choose to impose tariffs on exports like Wisconsin cheese and Kentucky bourbon, “creating natural opponents to the tariffs in Mitch McConnell and Paul Ryan,” said Clark Packard, a trade policy analyst for the Washington free-market think tank R Street Institute.
China has already imposed punitive import duties of up to 57 percent on certain U.S. polysilicon manufacturers in response to 2012 anti-dumping and countervailing duties.
In a recent note to investors, Credit Suisse analysts said they expect retaliation from the WTO and member countries opposed to the tariff, which could force President Trump to roll back any potential remedies. In the last Section 201 trade case filed against steel imports in 2001, tariffs were overturned within 21 months due to international pressure.
A broad coalition of U.S. stakeholders has come out against trade restrictions due to the implications for free trade and for the U.S. solar market, specifically.
Due to the reliance on foreign-made solar cells and modules, adding new tariffs could severely impact the solar market outlook. GTM Research calculates a tariff of 10 cents per watt on modules would reduce national installed capacity by 9 percent from the base forecast over the next four years. A 40-cents-per-watt tariff, which aligns with Suniva’s request, would cut projected solar capacity by half.
The outcome will have serious implications for the 260,000 workers currently employed in the U.S. industry, including the 38,000 workers who manufacture solar components in the U.S. A host of parties, including military experts, conservative policy leaders, utilities, solar developers and financiers have stated their opposition to imposing trade remedies.
The National Association of Regulatory Utility Commissioners, which represents state utility regulators from across the country, formally adopted a resolution last week urging the U.S. Trade Representative “to carefully weigh the harm that could result to energy customers from increasing the costs of solar inputs across the country.”
The U.S. steel industry, meanwhile, has backed SolarWorld and Suniva.
The Section 201 trade case is nearing its end, with the U.S. Trade Representative set to hear final arguments from stakeholders on December 6. President Trump must issue his final decision before January 13, 2018. He has the authority to adopt one of the ITC’s recommendations, devise an alternative, or do nothing.
Source: greentechmedia
