Solar Panel Tariff: Trump’s Stance on Trade with China Puts About 90,000 U.S. Jobs at Risk

Solar Panel Tariff
iStock.com/ByoungJoo

President Donald Trump’s “America First” platform could actually end up costing the U.S. jobs. Before the end of December, Trump is expected to decide whether or not to put punishing 35% solar panel tariffs on cheap imports of solar cells and panels, most of which enter the U.S. via trade with China.

But slapping a huge import tax on foreign solar parts is being called a big mistake by many. And a U.S. trade war with China could end up killing 90,000 U.S. solar industry jobs.

On the campaign trail, Trump railed against China’s trading deficit with the U.S. “We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world,” he said.

Trump has always talked tough on trade, but penalizing America’s trading partners does not automatically create U.S. jobs. According to the Solar Energy Industries Association, raising solar panel tariffs could double the cost of panels and put as many as 84,000 U.S. solar panel installers, as well as others in the industry, out of work by 2020.

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Not only that, artificially raising prices on foreign solar cells and panels due to the sonal panel tariff would hurt the burgeoning industry, stopping it in its tracks. Moreover, raising tariffs would hurt those that Trump promised to protect on the campaign trail: small contractors that employ blue-collar workers, the kind who would suffer from U.S. solar industry job losses. One in 10 people that works in the domestic solar industry are also veterans.

“The proposed tariffs are a direct attack on American workers and the booming solar industry in this country,” said David Bywater, CEO of Vivint Solar Inc (NYSE:VSLR). But not everyone agrees.

Suniva & SolarWorld Americas Trade Complaint Led to Trade Dispute with China

Two U.S. solar panel makers, Suniva and SolarWorld Americas, filed a complaint with the U.S. International Trade Commission in 2017, arguing that cheap, foreign solar cells and panels from China had ruined their businesses.

For its part, the commission is recommending tariffs of up to 35% on virtually all solar panel imports into the U.S.  Trump has until Friday, January 26 to make a decision on the recommendation.

Juergen Stein, CEO of SolarWorld Americas, said SolarWorld’s trade complaint was based on how new tariffs would encourage the industry to invest more in U.S. solar panel manufacturers, as well as innovation.

Stein vehemently disagrees with the conclusions of the Solar Energy Industries Association. He maintains that companies would be forced to hire hundreds of workers immediately if Trump raises tariffs.

In fact, an economic analysis conducted on behalf of Suniva and SolarWorld Americas found that imposing new tariffs on solar products will result in a net increase of at least 114,800 and as many as 144,300 new solar industry jobs. The Solar Energy Industries Association argues that the proper methodology was not used to come up with these figures.

It’s hard for us to see a scenario where these companies could get legally permissible trade relief that would enable them to compete in any market,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. “Our perspective is that while trade restrictive relief is not appropriate for these two poorly-run companies, we remain committed to supporting domestic manufacturing and are advocating for creative solutions that can resolve this deeply flawed case.”

SolarWorld Americas is the largest solar panel manufacturer in the U.S. The Oregon-based company employs around 300, but it once employed a lot more. In May 2017, the company filed a Worker Adjustment and Retraining Notification report with the state of Oregon announcing its intentions of laying off as many as 711 workers at its Hillsborough facility. The company said the layoffs were, “expected to be permanent.”

Meanwhile, in March 2017, Suniva announced significant layoffs in Georgia and Michigan. And in April, the Chinese owned, U.S.-based solar cell and panel manufacturer filed for bankruptcy. Eight days after Suniva’s bankruptcy announcement, the Suniva trade complaint was filed, and one month later, SolarWorld joined the battle. 

 

Sources

Donald Trump Calls China’s Trade Practice the ‘Greatest Theft in the World’,” ABC News, May 2, 2016.

Solar Energy Advocates from Manufacturers to Installers Testify in Washington Against Trade Petition,” Solar Energy Industries Association, October 3, 2017.

Solar panels: A fight with China that Trump may want to avoid,” CNN, January 18, 2018.

Impact of the Section 201 Remedy On Employment in the US Solar Industry,” Mayer Brown LLP, August 2017.

SolarWorld Americas Inc. WARN Notice,” State of Oregon, May 19, 2017.

2017 WARN Reports,” Georgia Department of Economic Development, last accessed January 18, 2018.

Suniva WARN Notice,” State of Michigan Workforce Development Agency, last accessed January 18, 2018.

New Delaware Chapter 11 Filing – Suniva, Inc.,” United States Bankruptcy Court for the District of Delaware, last accessed January 18, 2018.

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