The Trade War and Tariff's

Jessica PirroJune 4, 2019 1851 0

What's Going on With the Trade War?

The trade-war between the U.S. and China has been going on for quite sometime and it escalated in 2018 when trump placed a tariff on imported solar goods. The tariff that was placed on imported solar goods is expected to raise solar installs by 10 percent. Usually when there’s a tariff placed on certain goods, the country that is getting the good imported is the one that is paying the tariff, however in this case, the country who is exporting the goods is the one who paying the price.  

The History

In order for our readers to fully understand the tariff’s and what’s going on with them we are going to dig into the history of these tariffs.

These tariff’s were put in place because of a trade war that has been going on between the U.S. and China for the past few years. One of the major factors that has affected this trade war was the anti-dumping tariff that was placed on china. An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. The world trade organization doesn’t regulate the actions of companies engaged in dumping, but instead focuses on how governments can or cannot react to dumping. The united states imposed a 500 percent import duty on certain steel imported from china. In 2018, china filed a complaint with the World Trade Organization (WTO) challenging the tariffs imposed by president Donald Trump. The white house’s trade agenda for 2019 said it would continue to use the WTO to challenge what it called unfair trading practices with china and other trading partners.

The trump administration placed a section 201 on imported solar cells and modules. January 23, 2018, president trump signed a proclamation that placed tariffs on imported solar cells and modules for a period of four years. This decision came on the heels of a nearly 9-month case before the U.S. International Trade Commission (ITC) after two solar manufacturers, Suniva and Solarworld, filed a petition seeking tariffs. The final tariff will have significant negative impacts on the entire solar industry, from manufacturing and distribution and installation and finance.

These tariff’s are effective date of the tariffs is February 7, 2018. The tariff level was set at 30%, with 5% declining rate per year over the four year term of the tariff. There is a proclamation included an exception for 2.5 gigawatt cells per year, they don’t include sub-quotas for individual countries. The only countries excluded from the tariff are those that the u.s. Government deems “GSP-eligible” Developing nations. However, the Philippines and Thailand are not excluded, even though they are GSP-eligible.

The U.S. International trade commission released an explanation of how these tariff’s will work. Year one the safeguard tariff on modules and cells, the solar tariff will be 30% with 2.5 gigawatt cells exempt from the tariff. Year 2, the solar tariff will drop 5% to 25% with the 2.5 gigawatt cells still being exempt. Year 3, the solar tariff drops to 20 percent, with no tariff on the 2.5 gigawatt cells. Year 4 the solar tariff will have fallen to 15% and the 2.5 gigawatt cells will still be exempt from the tariff.

What Does This Mean for the American Solar Market?

These tariff’s bring up the question, what does this mean for the American solar market? One of the benefits that these tariff’s has brought to the u.s., is it has brought solar manufacture’s to the united states. Jinkosolar has started manufacturing solar panels in Jacksonville, Florida. Lg has moved their manufacturer to Huntsville Alabama. The solar cell manufacturer q-cell moved to Whitefield county, Georgia. Another solar panel manufacturer that is moving to the u.s. Is Silfab, they are moving to Bellingham, Washington. The trump administration is considering this a win, manufacturer’s moving to the u.s. Means that more jobs moving to the united states.  

However, even though some solar cell manufacturers are moving to the united states, the top three solar companies, Solaredge, Enphase and AP system are all manufactured outside of the united states. This will be an issue because June 1st 2019 the prices on these items went up.  

What Does This Mean for the American Solar Consumer?

Moving on, what does this mean for the American solar consumer? Well the American solar consumer is left to absorb some of the costs. In only six months the quoted price for solar panels raised by 5.6 percent than they were before the tariff’s were set into motion. American consumers expected this increase was expected and since the solar tariff resulted in a 16 cents per watt raise, which on average for a standard 6 kilowatt system, is 960 dollars. The tariff has cost the American tax payer 236.5 million dollars in taxes.

What Does This Mean for Solar Jobs?

What does this mean for jobs in the solar industry? The solar industry is one that has created lots of jobs in the solar industry in the united states. But these tariff’s have created a lot of turmoil for the solar industry. According to the solar jobs census, in 2017, 10,000 solar energy workers lost their jobs which was followed by 8,000 solar energy workers loosing their jobs in 2018.

What Does This Mean for the Solar Industry As a Whole

The solar industry isn’t a stranger to tariff’s. Back in 2012, the Obama administration placed a 31 percent tariff on outsourced solar materials and the solar industry still managed to thrive. Tariff’s are a big deal, but unlike many news outlets are insinuating, these tariff’s aren’t going to be the death of solar energy. Shocking as may be, the news outlets are over exaggerate in how bad the tariff’s may be. If the solar industry can survive the Obama administration’s tariff’s, they’ll have no problem surviving trumps tariff’s.

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