U.S. President Trump receives report on possible new solar tariffs

U.S. President Trump receives report on possible new solar tariffs

After two U.S. solar manufacturers filed for bankruptcy protection earlier this year, the ITC agreed that the import of cheap solar products harms local companies. It has thus drawn up a plan of possible measures to improve the situation. President Trump received it earlier this month and has 90 days to give his pending approval.


In the U.S., the quest to protect domestic solar panel manufacturers continues. It has been half a year since Georgia-based solar manufacturer Suniva filed for bankruptcy protection in April, followed shortly after by its competitor SolarWorld. In the same month, Suniva requested a Section 201 investigation.

Not long after, the U.S. International Trade Commission (ITC) backed this move. After unanimously deciding that the import of cheap products is a serious harm for local manufacturers, a first announcement of possible measures, compiled by the four sitting commissioners, was made in October. It consisted of quotas, tariffs and a licensing fee to impose on imported chrystalline silicon photovoltaic cells and modules – the most popular type of material for solar panels. It took until mid-November, however, for the I.T.C. to send a report to President Donald Trump, detailing three possible new trade duties.


ITC’s proposed steps are different to companies’ request

The Commission’s proposed steps do not agree entirely with those requested by the two companies. Suniva and SolarWorld are striving for a combination of tariffs, quotas and a floor price to remain unchanged for four years, which is the longest period duties can remain in effect before a review and potential renewal ensue. The ITC, however, suggested a licensing fee from the Solar Energy Industries Association (SEIA), who are strongly opposed to the tariffs. The fees would be imposed on imports from South Korea and Mexico, as China and Taiwan already had duties levied in the past.


Mixed reactions and possible counterstrikes

The report was received with mixed reactions. While Suniva and SolarWorld feel the measures are not strong enough to make a difference for local companies, SEIA is relieved they are not as harsh as initially feared.

Meanwhile, other countries – especially those affected by the new tariffs – could act in an retaliatory manner. This could be done by involving the World Trade Organization (WTO) or by targeting U.S. export products in a similar manner.


Case is very controversial and ultimately to be decided by Trump

The case has already caused much controversy and sparked unusual alliances, among them conservative think tank Heritage Foundation and the American Legislative Exchange Council, who joined forces against the new tariffs.

Ultimately, however, the decision whether or not the new tariffs will be implemented lies with Trump. He has 90 days to make a decision, hence it may take until the new year.

There are three possible options: to do nothing, devise stiffer tariffs or other remedies or impose the ITC’s recommendations. As Trump has previously expressed a desire for new tariffs, he might consider an approval just fitting.