Governors' Wind Energy Coalition

President Trump formally signed solar tariffs into law yesterday and declared “there won’t be a trade war.”

Joined in the Oval Office by U.S. Trade Representative Robert Lighthizer, Trump inked an executive action establishing a 30 percent tariff on solar panels imports.

The tariff will decline in increments over the next four years, according to the plan (Greenwire, Jan. 22). The president also signed import costs on washing machines.

“These executive actions uphold the principle of fair trade and demonstrate to the world that the United States will not be taken advantage of anymore. Our companies will not be taken advantage of anymore,” Trump said.

The president said he was directing Lighthizer to continue working to resolve duties on solar and other products. When asked about steel and aluminum, Trump said, “We’re looking at it; we’re looking at a lot of things.”

And he said if negotiations surrounding the North American Free Trade Agreement don’t work out, “we’ll terminate it,” according to a White House press pool report.

More details

The trade representative released a revised fact sheet outlining in more detail how the solar tariffs would operate. Countries including China, Canada, Mexico, Thailand and South Korea are covered, according to the document.

Trump’s move was expected for months, considering his America First and trade protection rhetoric. The two petitioners that pressed for action, Suniva Inc. and SolarWorld Americas, requested duties to revive solar manufacturing in the face of what they said were unfair, cheap imports primarily from Asian-owned companies.

“Over the last 5 years, nearly 30 American solar manufacturers collapsed; today the President is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight,” Suniva said in a statement.

The decision leaves several outstanding questions about the full impact of trade barriers and how much pushback might occur from other nations at the World Trade Organization.

Yesterday, China, South Korea and the European Union condemned the tariffs, with China calling them an “abuse,” according to Reuters.

The U.S. has lost at the WTO every time it has tried to enact tariffs under Section 201, the portion of the 1974 Trade Act the White House relied on in the solar case.

When the U.S. tried to slap global duties on imported steel in 2002 under the same law, multiple countries threatened retaliation after a successful WTO challenge.

In a recent interview, George Washington University trade expert Michael Moore said a similar dynamic could occur, although a challenge might take several years to work its way through the WTO.

Costs

The tariffs were not as severe as many expected. Apart from the petitioning companies, solar interests were generally opposed to them.

“The reality is that we determined that a 30 percent tariff was something we could live with,” said Jigar Shah, a co-founder at venture capital firm Generate Capital Inc.

The president’s final action reflected the solar industry’s high-level meetings with the administration, he said.

Still, the Solar Energy Industries Association is estimating 23,000 American jobs could be lost this year because of the Trump tariffs.

On a conference call today, SEIA President Abigail Ross Hopper said the industry could lose roughly 2 gigawatts of installations this year, or about a sixth of the total expected level.

“This is not the right decision,” she said.

Clearview Energy Partners LLC estimated tariffs could increase the cost of residential rooftop solar systems by about 4 percent and the cost of distributed commercial solar projects by about 6 percent.

GTM Research also projected in a note this afternoon that U.S. photovoltaic installations will decrease by 11 percent over the next five years because of the tariffs. The market will be hit the hardest in 2019, it said.