US to slap 30 percent tariffs on solar manufacturers

World Today

Workers walk past solar panels in Jimo, Shandong Province, China, April 21, 2016. China Daily/via REUTERS

U.S. President Donald Trump is slapping tariffs on imported solar modules and cells—starting at thirty percent in the first year.

The tariffs are expected to hit hardest in China. According to the White House, China dominates the market, producing “60 percent of the world’s solar cells and 71 percent of solar modules.”

A press release from the U.S. Trade Representative (USTR) said the tariffs will start at 30 percent in the first year, but will drop five percent each year over the next three years. In each of these years, the first 2.5 gigawatts of imported solar cells will be tariff-free.

The USTR action also includes a 20 percent tariff on the first 1.2 million imports of large residential washing machines made by Korean firms in China. For imported washers above that quota, the U.S. will charge a 50 percent tariff. This is for the first year only. In subsequent years, the tariffs will decrease in five percent increments.

The U.S. accuses Beijing of unfairly subsidizing its solar companies to help them dominate the global supply of solar cells.

Beijing has opposed unilateral trade penalties by the U.S. Analysts warn that this trade action against Chinese products could later include steel and aluminum—an expansion that could spark a trade war.

 “Taking frequent trade remedy measures to the same kinds of products, is over-protecting US trade, and an abuse of trade remedy measures,” said Wang Hejun, Director of Trade Remedy & Investigation Bureau at the Chinese Ministry of Commerce.  “We are deeply dissatisfied with the US actions. ”

“The question is — can this get out of hand? If you levy penalties that are seen as significant, then from a Beijing perspective, they need to retaliate in some way,” said Yukon Huang, an expert on China’s economy at the Carnegie Endowment for International Peace.

“The danger of this is cross retaliation,” added Stephen Kho, who spent nine years at the U.S. Trade Representative’s office and is now at the law firm, Akin Gump. “The danger is tit for tat action…possibly a trade war.”

Director Wang acknowledges a trade war is a real concern.
“We are concerned about a trade war, and we don’t want to see one between China and the US. It will not only negatively affect the two countries’ economies, but also the global one. As the trade volume between the two countries is large, trade frictions in some sectors is inevitable. But it is vital to manage these, and not let them affect the economic and trade cooperation,” he said.

A U.S. solar industry trade group warns the trade action could boomerang, and destroy American jobs.

In a statement, the American Solar Energy Industry Association wrote: “The decision effectively will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing, and it will result in the delay or cancellation of billions of dollars in solar investments.”

SEIA is advising the industry to see the tariff implemented early next month.  “The safeguard statute indicates that a trade remedy is effective 15 days after the proclamation of a remedy by the president,” an association statement tells CGTN.  President Trump is expected to sign the 201 actions – on Tuesday. 

Read the original proclamations from The White House:

Presidential Proclamation to Facilitate Positive Adjustment to Competition from Imports of Large Residential Washers

Presidential Proclamation to Facilitate Positive Adjustment to Competition from Imports of Certain Crystalline Silicon Photovoltaic Cells