President Trump on Monday imposed tariffs of 30 percent on imported solar panel technology in a bid to protect domestic manufacturers while signaling a more aggressive approach toward China.
The move is a major blow for the $28 billion solar industry, which gets about 80 percent of its solar panel products from imports.
The Solar Energy Industries Association predicted the tariffs would increase prices and kill 23,000 jobs. The group represents manufacturers as well as installers, sellers and others in the field.
“While tariffs in this case will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs,” Abigail Ross Hopper, the group’s president, said in a statement.
Suniva and SolarWorld Americas, the bankrupt companies which requested the tariffs, say tariffs would boost domestic manufacturing and add more than 100,000 jobs.
The tariffs unveiled Monday apply to all imported solar photovoltaic cells and modules, the main technology on panels that convert solar energy into electricity.
While the action is targeted at imports from China, Trump’s tariffs apply to all imports, since Chinese manufacturers have moved operations to other countries.
“The president’s action makes clear again that the Trump administration will always defend American workers, farmers, ranchers and businesses in this regard,” U.S. Trade Representative Robert Lighthizer said in a statement Monday announcing the decision along with a decision to impose tariffs on imported washers.
SolarWorld Americas, a unit of a German company, said in a statement that it was grateful for Trump’s work, but it is still reviewing whether the tariffs are high enough. It had sought 50 percent tariffs.
“We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States,” Juergen Stein, the company’s CEO, said in a statement.
“We will work with the U.S. government to implement these remedies, including future negotiations, in the strongest way possible to benefit solar manufacturing and its thousands of American workers to ensure that U.S. solar manufacturing is world-class competitive for the long term.”
Suniva, meanwhile, cheered the tariffs.
“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,” the company said. “This is a step forward for this high-tech solar manufacturing industry we pioneered right here in America.”
The move is the first major tariff decision Trump has made unilaterally in office. Through his presidential campaign and his first year in office, Trump repeatedly promised to aggressively go after China and other nations that he feels conduct unfair trade practices and hurt domestic industries.
The new tariff falls to 25 percent after a year, and then 20 percent and 15 percent each year after, before phasing out entirely. The first 2.5 gigawatts of imports each year are exempt.
Solar panels already are subject to significant tariffs when imported from China and Taiwan.
Suniva and SolarWorld Americas requested tariffs of 50 percent on imported panels last year, saying their operations were decimated by cheap imports. The International Trade Commission endorsed tariffs of up to 35 percent after it ruled that domestic manufacturers suffered “serious injury” from the imports, a finding required to impose tariffs under Section 201 of the Trade Act of 1974.
Most of the rest of the solar industry, including installers and companies that make related technology, oppose the tariffs, saying they would threaten tens of thousands of jobs.
The right-wing R Street Institute said Trump’s decision was a disappointing loss for free trade.
“More good-paying jobs will be jeopardized by today’s decision than could possibly be saved by bailing out the bankrupt companies that petitioned for protection,” said Clark Packard, trade policy counsel for the group. “Today’s decision also will jeopardize the environment by making clean energy sources less affordable.”
The tariffs have attracted opposition from numerous corners, including renewable energy industries, environmentalists, free-market advocates, conservative activists and advocates for other energy sources.
The dispute is likely to be settled eventually by the Switzerland-based World Trade Organization (WTO), where China and other countries are nearly certain to challenge the tariffs as a violation of international law.
The provision under which Trump took action has been used rarely, and its tariffs are almost always struck down by the WTO. The last time it was used was in 2001 for steel imports, and the WTO overturned the penalties.