US President Donald Trump imposes a solar panel tariff on imports. The decision could cost thousands of jobs in the United States and billions of dollars in lost investments. Shutterstock photo.
30 per cent solar panel tariff a blow to global industry
On Monday, US President Donald Trump introduced a 30 per cent tariff on solar panel imports, which critics say will likely slow investment in US solar power and cost thousands of US jobs.
The move is intended to help American manufacturers and will drop to 15 per cent within four years. Under the ruling, up to 2.5 gigawatts (GW) of unassembled solar cells can be imported to the US, tariff free annually.
According to Reuters, stocks in European and Asian solar groups fell after the tariff was introduced. Shares in SMA Solar, Germany’s largest solar group which sees 46 per cent of its sales in the Americas, were down 4.6 per cent. Norway’s REC Silicon was down 1.2 per cent.
Despite the drop in share value and looming tariff, SMA Solar says “We do not expect a major collapse of the US market”.
Germany’s Finance Minister Peter Altmaier says the price of solar products in the US is expected to rise as a result of the tariff.
Solar Energy Industries Association, a US based non-profit trade group, says the solar panel tariff could cost about 23,000 jobs in the United States this year. It could also result in the delay or cancellation of billions of dollars in solar investments.
In defending the tariff, the US government says domestic manufacturers could not compete with what it calls artificially lower-priced Asian panels.
The Ministry of Industry and Information Technology in China says Chinese solar companies are likely to cut back on overseas expansion following the move.
“China’s solar industry has been growing at a fast pace in recent years, making itself a target of protectionism in some countries,” it said.
The Chinese Ministry of Commerce said the decision also damages the global trade environment.
In response to the tariff, South Korea said it would “actively respond to US trade protectionism”, including exercising its rights under the World Trade Organization.
And Morgan Stanley said the economic damage caused by the tariff could impact the US economy further, as the Trump protectionist stance “could challenge investors’ perception whether the US will adhere to current free trade policies”.
Shares in SunPower, a US solar panel maker rose 0.8 per cent following the announcement and Tesla shares rose by 1.5 per cent. Along with the electric car, Telsa produces solar panels.
But, Reuters reports analysts are concerned because “the overwhelming majority of the 260,000 solar jobs in the U.S. depend on the cheaper imported products,” according to Height Securities.
And businesses as well as consumers are expected to see a rise 3-7 per cent rise in utility scale and residential solar costs, respectively, according to Goldman Sachs.
There may some global solar panel manufacturers who are excluded from the tariff.
“Two key exclusions with respect to technology and certain countries (Canada/Singapore, among others) were included as part of the (initial) recommendation,” Goldman Sachs said.
China-based ReneSola’s US Chief Executive Officer Doran Hole says there may be ways to settle the impending trade dispute.
“There is quite a bit of discretion about … negotiations for a settlement. Having a global settlement would certainly be useful to the industry as a whole.”
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