Last January 23, the U.S. Trade Representative announced that the United States would be imposing tariffs on imported solar panels which in effect, was a warning shot at China, the world’s leading manufacturer of solar power production.
Robert Lighthizer of the U.S. Trade Representative has accused China of implementing unfair trade practices in order to have an advantage over competitors in the global market.
U.S. President Donald Trump’s proposal calls for a four-year tariff schedule with 30% in the first year, 25% in the second, 20% in the third and 15% in the fourth.
The announcement was met with celebration by SolarWorld Americas Inc., and Suniva which initiated the petition for the U.S. International Trade Commission (ITC) to protect the solar panel manufacturing industry from competition from international manufacturers that could produce cheaper products.
Both SolarWorld Americas and Suniva are subsidiaries of foreign companies that manufacture solar panels and cells in the United States. Suniva declared bankruptcy in April 2017.
Although the tariffs fell short of the 50% eyed by the petitioners applauded the President’s and the Trade Representative’s decision. For SolarWorld and Suniva the imposition of tariffs meant the President recognized the “importance of solar manufacturing to America’s economic and national security.”
However, not all solar panel manufacturers are on the same side.
The Solar Energy Industries Association (SEIA) did not agree with the imposition of tariffs. SEIA believes the move could lead to the loss of 23,000 American jobs and dampen investments made in the solar industry worth billions of dollars.
SEIA figures showed that the U.S. solar industry generated approximately 38,000 jobs in 2016 but only 2,000 of those were in the production of solar cells and panels.
The bulk of the 36,000 jobs were distributed in the manufacture of products that enhanced the panels including metal racking systems or inverters which convert direct- current output into usable alternating current.
By stark contrast, Chicago based law firm Mayer Brown released its economic analysis which showed that a tariff system could generate between 115,000 to 144,000 new jobs in the U.S. solar panel industry. 45,000 of those jobs would be in the manufacturing sector.
SEIA President and CEO Abigail Ross Harper expressed doubts the tariffs would help the U.S. solar panel industry. Instead Hopper advocated a global solution that could potentially benefit all parties on the supply chain.
In particular, Hopper suggested exporting American polycrystalline silicon which is used in most solar energy applications.
“Our economy benefits when we have free trade. If you think about who’s going to be impacted by this decision, it’s going to be the countries where there was the largest number of imports in the last year. Those are countries like Thailand, Malaysia, South Korea – important trading partners and ones that will be significantly impacted.”
Ben Santarris of SolarWorld Americas believes the tariffs will boost productivity in the U.S. solar panel manufacturing industry:
“This is an extremely important decision for U.S. manufacturing in the solar industry. We’re hopeful it’s going to address the global imports surge and unfair trade practices of foreign manufacturers. The case is about saving and rebuilding this U.S. industry. We’re the second largest solar market in the world and yet almost all of our manufacturers have been put out of business by China.”