The Trump administration this week announced new tariffs on imported solar panels. Sebastien Bozon/AFP/Getty Images
The president this week announced new duties on Chinese-manufactured solar panels.
By Andrew Soergel / 01.23.2018
President Donald Trump’s administration has announced plans to hike tariffs on imported solar panels by as much as 30 percent – a protectionist pivot that experts say will cost the U.S. thousands of jobs while striking a significant blow to the renewable energy sector.
The tariffs announced Monday are the result of a so-called “safeguard” investigation launched by U.S. Trade Representative Robert Lighthizer in May, with the goal of determining whether the government should take temporary action to relieve U.S. producers from low-price imports. In a statement on Monday, Lighthizer’s office said cheap solar products from China, in particular, represented a “substantial cause of serious injury to the domestic industry” and that tariffs would provide American producers with a more level playing field.
But the higher cost of solar imports is expected to hurt American companies that design mounting systems and provide installation services, working adjacent to the panel production industry. The Solar Energy Industries Association estimates 23,000 American jobs will be lost this year as a result of the tariffs and that billions of dollars of renewable energy research and investment could be retooled or scrapped entirely.
“There’s no doubt this decision will hurt U.S. manufacturing, not help it,” Bill Vietas, president of RBI Solar in Cincinnati, said in a statement circulated by the Solar Energy Industries Association. “Government tariffs will increase the cost of solar and depress demand, which will reduce the orders we’re getting and cost manufacturing workers their jobs.”
Vietas was one of 27 industry executives who wrote to the U.S. International Trade Commission back in August asking that the government avoid tariffs that would force American companies to “cut our operations.”
“This is a bad day for the U.S.,” Costa Nicolaou, president and CEO of PanelClaw, said in a statement Monday, warning that the duties “will cause great economic pain for so many families in the solar sector.”
The tariffs come as the administration continues efforts to retool environmental regulations that have restricted the operations of oil drillers, coal miners and companies that rely on fossil fuels.
Earlier this month, for example, Interior Secretary Ryan Zinke announced plans to significantly relax barriers to oil and gas drilling off American coastlines. And Trump’s withdrawal from the Paris climate pact last year represented one of his first significant shakeups of standing U.S. agreements in place before he took office.
That has led some industry advocates to speculate that the administration had other motives for imposing the tariffs.
“Make no mistake, this is the government intervening in the marketplace to reduce the expansion of solar energy,” Gregory Wetstone, president and CEO of the American Council on Renewable Energy, said in a statement Monday. “While we are confident that the American solar sector will remain vibrant, this is a needless drag on an important source of domestic investment and job creation.”
Lighthizer’s office has said the move was motivated primarily by a desire to reduce the chances of Chinese companies undercutting American producers on solar panel pricing.
The investigation was sparked after Suniva, a U.S.-based solar manufacturer, petitioned the U.S. International Trade Council to look into allegations of product dumping. The company ended up filing for Chapter 11 bankruptcy last year and has said it struggled to compete with the cheaper prices of imported goods. SolarWorld, a German solar company, offered similar complaints to U.S. trade officials and called for the government to take action.
“SolarWorld Americas appreciates the hard work of President Trump, the U.S. Trade Representative, and this administration in reaching [this week’s] decision, and the President’s recognition of the importance of solar manufacturing to America’s economic and national security,” SolarWorld CEO Juergen Stein said in a statement Monday.
Notably, however, this isn’t the first time the U.S. has taken action against Chinese solar exports. The Obama administration in 2012 designed tariffs to address what it viewed as unfairly low panel prices, but Chinese companies were in some cases able to work around the restrictions by opening plants in other Southeast Asian countries and exporting from there.
Lighthizer’s report noted Chinese producers’ habit of “moving production abroad” to avoid duties, so trade officials considered at least one potential loophole in structuring the tariffs.
“It’s not a new thing. I thought it was wrong when Obama did it. I think it’s wrong when Trump does it, particularly when he’s accompanied by this protectionist rhetoric,” Joseph Stiglitz, an economics professor at Columbia University and Nobel laureate, told Bloomberg on Monday. “It’s bad for the global environment. It’s bad for the American economy. It’s bad for jobs in the United States.”
Research company Clearview Energy Partners indicated in a report Monday that the tariffs would lead to “greater trade risk for all types of energy, particularly if other nations establish new trade barriers against U.S. products.” And China has separately threatened to begin retaliating against the American trade actions, with state-owned press warning earlier this month that Sino-American relations are in for a “bumpy journey” in 2018 if U.S. protectionism continues.
In a statement on Monday, Wang Hejun, the head of the Chinese commerce ministry’s Trade Remedy and Investigation Bureau, described the tariffs as an “overreaction” by the U.S., calling the move an “abuse of trade remedy measures.”
Stiglitz, however, said he isn’t immediately concerned about retaliation.
“I’ve talked to senior people in China. They’re going to be restrained,” he said. “They have taken a measure of Trump, and my sense is they are more responsible than Trump.”