Two foreign-owned solar companies convinced President Donald Trump’s administration Monday to approve a 30 percent tariff on solar panel imports, despite warnings that the move could kill the industry.
The U.S. solar industry opposed the tariff on push, as some producers and free market groups claim they would raise prices and hurt the sector. Two cash-strapped foreign companies, meanwhile, argued panels from China and elsewhere were hurting domestic manufacturing.
The tariffs are expected to last four years and decline in increments of five percent from 30 percent, 25 percent, 20 percent and eventually 15 percent in the fourth year. They are lower than the 35 percent the U.S. International Trade Commission initially recommended in 2017.
Former President Barack Obama issued two earlier rounds of tariffs on imports during his administration, so the new round carries on a fledgling tradition. The new set of tariffs satisfy a major plank of Trump’s trade policy — using protectionist tariffs to protect domestic workers.
“The President’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard,” U.S. Trade Representative Robert Lighthizer said in a press statement Monday.
Suniva and SolarWorld, both of which are owned by foreign companies in China and Germany, respectively, orchestrated a campaign last year to enact tariffs on cheap technology from China a week after they filed for bankruptcy.
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Suniva, which has also received $8.8 million in federal grants from 2010 to 2016, was founded in Georgia but now has a Chinese-majority owner. It also has access to millions more from the state government and communities in Michigan.
New tariffs on imports have roiled the solar industry, which has benefited from a 70 percent drop thanks to cheap imports and federal subsidies in the cost of solar since 2010. People began purchasing panels at record rates ahead of the trade commission’s vote.
The solar industry has grown by leaps and bounds during the past decade, mostly because green energy providers have capitalized on hefty government subsidies and tax credits. Solar prices have declined by more than 50 percent since 2011 as a result and has allowed the industry to add more than 50,000 jobs in 2016.
Solar providers are not enthusiastic supporters of the move. They are worried any tariffs could seriously crimp the gains made in the industry — and their concerns about the president’s positioning on the matter are well-founded. Trump is generally supportive of heavy tariffs on imports that he believes hurt American businesses.
U.S. solar installations could fall from 72.5 gigawatts cumulatively to just 36.4 gigawatts under a $0.78 per watt minimum module price scenario, according to a report last year from Greentech Media, a marketing research group based in Massachusetts. The country could miss out on more than 47 gigawatts of solar installations, the report notes.
The solar industry ran ads hoping to persuade Trump not to enact tariffs. U.S. Made Solar, a coalition of U.S.-based solar manufacturers, ran TV advertisements on Fox News shows in October of 2017 urging the president to dismiss calls for restriction on cheap solar imports. The TV ad buy component was part of a seven figure ad buy.
Free market groups have also expressed dismay at Trump’s decision. “The petitioners in this case — both bankrupt firms that are majority foreign-owned — employ about 1,000 Americans, while the rest of the domestic industry employs more than 260,000 Americans up the entire value chain.” Clark Packard, trade policy counsel at the R Street Institute, said in a statement to The Daily Caller News Foundation.
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