U.S. trade officials on Friday empowered President Donald Trump to impose tariffs that could cut off the solar energy industry from the cheap foreign-made panels that have driven its explosive growth.
The tariffs under consideration are meant to protect a small number of American solar-panel manufacturers reeling in the face of cheap imports. The U.S. International Trade Commission voted to enable Trump to impose them at the behest of two distressed firms that warned the American panel manufacturing industry is in a state of collapse.
But most of the rest of the solar industry fiercely opposes the levies, which independent analysts warn would drive up consumer prices and cause the number of annual solar installations in the U.S. to plunge. Only a fraction of American solar companies make the panels. Most rely on imports to keep prices competitive with other forms of electricity. More than 90 percent of solar installations in the U.S. use imported panels.
The governors of Nevada, Colorado, Massachusetts and North Carolina had implored the trade commission not to authorize tariffs in a last-ditch lobbying effort Thursday. A letter they wrote warned of a “devastating blow on our states’ solar industries” and “unprecedented job loss, at steep cost to our states’ economies.” In California, which would get hit with more job losses than any state, the governor’s office has also been closely watching the situation.
Congress also weighed in, with 69 Republicans and Democrats urging commissioners against greenlighting the tariffs. Several think tanks on the right that have long tangled with the solar industry also lobbied against the tariffs, warning they would be an affront to free trade.
Now the matter is in Trump’s hands. The president has been eager to use tariffs in a bid to revive flagging U.S. manufacturing industries, and the commission vote will test his resolve as a protectionist.
Commissioners will take the next few weeks to consider how steep the tariffs should be and make a recommendation to the White House. Trump is not obligated to follow their advice.
Solar companies worry the administration will heed the request of the firms that brought the action and hit foreign manufacturers with a tariff that will raise the price of their panels from 35 cents per watt to 78 cents, which is around the cost of the American product.
Analysts project such a price hike would quickly cut in half the number of annual solar power systems installed in the U.S.
The action was filed by Georgia-based Suniva, a firm that is in bankruptcy. Joining Suniva in requesting the levies was Oregon-based SolarWorld, a struggling subsidiary of the bankrupt German firm SolarWorldAG.
The case was filed under a rarely exercised provision of trade law called Section 201, which enables the president to broadly impose tariffs if the commission finds such a drastic move is needed to protect an American industry from a deluge of foreign imports. It hasn’t been exercised since 2001, when George W. Bush invoked it in an effort to protect the U.S. steel industry from Mexican and Canadian imports. The move sparked retaliation, and the World Trade Organization ultimately voided the steel levies two years later.
The Solar Energy Industries Association projects that 88,000 installation and other jobs in the American solar sector would be lost if the tariffs Suniva and SolarWorld are seeking are imposed.
Posted with permission from Tribune Content Agency