In a bid to protect US solar panel manufacturers swamped by subsidised Chinese products, US President Donald Trump yesterday approved steep tariffs of 30% on imported cells and panels.
But far from praising the move, a US solar-industry trade body damned it, saying it would suppress demand for solar installations and cause as many as 23,000 jobs to be lost in a thriving supply chain that relies on ever-cheaper Chinese panels.
It boggles my mind that this president would voluntarily choose to damage one of the fastest-growing segments of our economy– Tony Clifford, Standard Solar
Critics said the barrier would not boost American production, and that it merely pandered to two, foreign-owned manufacturers based in the US, one of which filed for bankruptcy last year.
Announcing Trump’s approval of the tariffs, which also target washing machines, US Trade Representative Robert Lighthizer said subsidised imports are "a substantial cause of serious injury to domestic manufacturers".
"These cases were filed by American businesses and thoroughly litigated at the International Trade Commission [ITC] over a period of several months," Lighthizer said. "The ITC found that US producers had been seriously injured by imports and made several recommendations to the President."
Lighthizer said he and his staff "conducted an exhaustive process" of hearings and meetings before making the recommendations.
"The President’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard," he said.
The solar tariff is structured to add 30% to the product price in the first year, 25% in the second year, 20% in the third and 15% in the fourth. The tariff won’t apply to the first 2.5 gigawatts-worth of imported solar cells in each of the four years.
In a briefing note explaining the rationale for the tariff, Lighthizer’s department said China’s share of global solar cell production skyrocketed from just 7% in 2005 to 61% in 2012.
It said China now dominates global supply chain capacity, producing 60% of the world’s solar cells and 71% of solar modules.
The competition is unfair, the note said, because the Chinese state subsidises solar companies, funds research and development, and hothouses capacity expansion.
Donald Trump with Melania Trump (Wikimedia Commons)
This effectively killed off the US solar manufacturing sector, said the note, since between 2012 and 2016, imports into the US grew by around 500% and prices "dropped precipitously".
In response to US anti-dumping measures in 2012 and 2013, Chinese companies simply moved production offshore, first to Taiwan and then to Malaysia, Singapore, Germany and Korea.
Twenty-five American solar producers have gone bust since 2012, and only two producers of both solar cells and modules, and eight firms producing modules using imported cells, remain viable, according to the note.
The mind boggles
But while US solar producers have been wiped out by cheap imports, the very cheapness of the core product has allowed another domestic manufacturing industry to thrive in the solar sector, said the trade body angry with yesterday’s move – the Solar Energy Industries Association (SEIA).
The SEIA said there were 38,000 jobs in US solar manufacturing, with only 2,000 of them making solar cells and panels.
The other 36,000 people made metal racking systems, high-tech inverters, machines that improved solar panel output by tracking the sun, and other electrical products.
In all, 260,000 people work in the US solar sector.
Tariffs, said Abigail Ross Hopper, SEIA’s president and CEO, "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."
Around 23,000 of those jobs would be lost this year because the tariffs will result in the delay or cancellation of billions of dollars in solar investments, she said.
She and several companies in her association accused Lighthizer and Trump of pandering to two of the remaining solar manufacturers still on US soil – foreign-owned Suniva and SolarWorld Americas Inc – who together last year petitioned the International Trade Commission, sparking Lighthizer’s investigation.
Critics say Trump is jeopardising good American jobs to bail out these two failing foreign firms.
Suniva, majority owned by a Chinese company, Shunfeng International Clean Energy Limited, filed for bankruptcy in April 2017.
SolarWorld Americas Inc is up for sale to relieve the German subsidiaries of its owner, Germany’s SolarWorld AG.
"It boggles my mind that this president – any president, really – would voluntarily choose to damage one of the fastest-growing segments of our economy," said Tony Clifford, chief development officer of solar project developer, Standard Solar. "This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries of an American taxpayer bailout."
Image: A sun-tracking solar power plant in the San Luis Valley of central Colorado, 2011 (Dreamstime)