Trump to receive solar tariff plan this week — sources
The administration faces a deadline of Jan. 26 to address a claim by two solar manufacturers that say cheap solar cells and panels from abroad — mainly China — make domestic manufacturing uncompetitive.
Those talks are heating up. Sources said high-ranking officials met yesterday to discuss the potential tariffs. Said to be in attendance were U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross and National Economic Council Director Gary Cohn.
Tariffs are a likely outcome, the sources said. Such a move would throw the burgeoning U.S. solar industry, which largely opposes trade remedies, into a frenzy.
Most of the solar industry and a collection of conservative think tanks oppose the tariffs, saying the types of tariffs being considered are overly muscular and would raise the costs of solar technology.
“Reports in the press indicate that a decision on the trade case may come very soon, and [the Solar Energy Industries Association] continues its relentless advocacy to ensure a positive outcome,” SEIA spokesman Dan Whitten told E&E News in an emailed statement. “Our meetings with administration officials have been very productive and our industry has been persuasive in linking high tariffs with the potential [for] immediate and significant job loss.”
The solar effort is part of a broader crackdown on what the White House sees as unfair trade practices from China and elsewhere. It also gives Trump a chance to deliver on his promises to boost domestic manufacturing. The U.S. International Trade Commission, an independent agency, recommended in October that the United States impose tariffs of up to 35 percent on imported solar equipment. The final decision is up to Trump.
“The domestic solar industry’s story is one that our members and the Commission have sadly seen before (severe overcapacity, rising imports, and crushing losses), and one that we will inevitably see again absent much needed trade relief,” the Coalition for a Prosperous America said in a letter to Trump today.
The White House did not confirm or deny that the high-level meeting occurred yesterday.
“There are several upcoming statutory deadlines related to trade. We will let you know when there’s an announcement at the appropriate time,” a White House spokesperson said in an email.
The four-member U.S. International Trade Commission last fall unanimously found injury to domestic manufacturers from imported cells and modules, teeing up the likelihood of trade relief.
One source said the administration has little sympathy for the petitioners who brought the case — solar manufacturers Suniva and SolarWorld Americas. Both are foreign-owned companies with a U.S. manufacturing presence, facing bankruptcy that they say is the result of unfair trade practices from China. But critics say the firms’ financial missteps are their own doing.
The source said conversations with the Trump administration indicate their thinking has shifted. The solar issue seems to be seen as another way the administration can flex its muscle on China. The White House is battling China on other trade matters, such as intellectual property theft, and is eyeing major trade announcements for Trump’s first State of the Union address, sources said.
“This is now about how do you slap China,” the source said. “This is not about helping these companies. This is about helping this new administration strike a posture.”
A representative for the petitioners, which have said other companies are exploring expanding manufacturing operations in the United States if trade protections come through, shot back against that claim.
“Only the remedies requested in response to China’s cheating, including robust tariffs and quotas on solar cells and modules, will make it possible for Suniva and other American solar manufacturers to start opening plants and putting people back to work in good-paying, middle-class jobs,” Suniva spokesman Mark Paustenbach said in an emailed statement.
Some of the finer details are still being worked out, sources said. Tariff rates are under discussion, and a tariff-rate quota — in which imports under a certain level face a lower tariff — is also in play.
SEIA met with Ross yesterday and industry representatives met with Lighthizer last week to press the case of domestic manufacturers, Whitten said.
The size of the potential tariffs is still uncertain, industry sources stressed. So, too, is whether any sort of exclusions might be applied. Open questions include whether nations with free-trade agreements with the United States would get different treatment, if solar cells would receive a different rate than solar modules, and whether there will be distinctions between varying technologies.
“I think it’s been very thoughtful, with each of the agencies involved, including the White House itself,” said the source who suggested the administration has shifted its emphasis to how the decision affects its stance toward China. “It has been a learning process, an education process within the industry. There’s been a lot of companies seeking different exclusions.”
A SEIA proposal that avoided tariffs is considered shelved, sources said. The trade group had suggested establishing an import license fee to be redistributed to manufacturers based on production.
“It’s no longer in consideration,” another industry source said. “There was a lot of concern with the legality … how the money would be distributed. And it’s a lot more complicated than [the administration] wanted it to be.”
SEIA and much of the solar industry have fought tariffs. They fear that raising the price of imported cells and modules would stymie the domestic supply chain, from module makers to installers. The sector employs 260,000 people in the United States.
“This licensing fee agreement is what the industry has gotten behind, and I feel like, quite frankly, that would be in the best interest of the petitioners,” said a third industry source.