Who puts Tariffs on Solar Panels?

Who Starts a Trade War over Solar Panels?

By Joe Hyer

Alternative energy resources are a critical part of any diversified energy plan.  It creates tens of thousands of jobs, improves the environment, and is inherently less wasteful.  Unlocking the potential of the SUN’s energy has been a goal of humanity for thousands of years.  Recent technological advances allowed for the creation of solar panels, which we are just beginning to learn to manufacture cost effectively.

On Monday, January 22, the White House announced new tariffs on imported solar panels- exempting the first 2.5 gigawatts, and instituting a 4 year tax, 30% the first year, then 25%, and so on.  What started all this?  In April 2017, Suniva Inc a bankrupt US solar manufacturer (with a Chinese majority owner) asked the US Government to impose duties, saying it was suffering from a flood of products from outside the US.  Production was surging globally, and prices were falling- but that’s simple supply and demand.  A month later, a the US unit of SolarWorld AG joined in the complaint (also a global company with US subdivision).  And in October, the US International Trade Commission recommended tariffs as high as 35%.

So this story has been a year in the making.  No, the President didn’t randomly decide to hate solar panels on Monday.

Who benefits?  Well, there’s First Solar Inc, a US solar company that makes some of its panels domestically.   Tesla Inc also just opened a factory in New York.  And the two bankrupt firms that started all this probably see their liquidation value increase.  Long term, it’s possible that Chinese solar manufacturers will build and open plants in the US.  Two are considering that now.  Of course- the duties expire in four years, not enough time to amortize a factory.

Who’s harmed?  Theoretically, those Chinese manufacturers who can’t sell their goods without a tariff.  The global market, however, is strong, so that might not hurt much.  US installers of solar panels are big losers, with the major industry trade group suggesting 23,000 jobs will be lost this year alone, nearly 10% of the industry’s workforce.  And the solar industry employs more people currently than work in coal or natural gas.

Of Note, tariffs also went into effect Monday on residential washing

machines.  Oddly, none of the news stories we found mentioned anything about why or how or what’s up with washers.  Apparently, they are not nearly as sexy as solar panels.  It’s also interesting that the washing machine saga begins back in 2011, when Whirlpool filed petition that Korea and Mexico were dumping washers cheap in the US, as part of an aggressive pricing strategy by LG and Samsung.  The Koreans struck back – moving production to China by 2015 to avoid the duties in place against Korea.  Whirlpool sought relief again from the Trade Commission, who issues an anti-dumping order on China.

So what does LG and Samsung do? Move production to Thailand and Vietnam, of course.  It’s like a game of Whack-O-Mole, only with washing machine factories.  And as the US was getting ready to strike back again, both LG and Samsung announced plans to build large factories in Newberry, South Carolina and Clarksville, Tennessee.

So maybe all these duties and tariffs CAN lead to US manufacturing, and not just a trade war.  Hmmm