The U.S. International Trade Commission held a nearly 10 hour initial public hearing this past Tuesday on a petition seeking tariffs and price minimums on low cost imported solar panels.
The petition seeks duties of 40 cents per watt on imported solar cells and also a floor price of 78 cents per watt on solar panels made by foreign manufacturers.
Suniva, a solar panel manufacturer, now in bankruptcy, initially submitted a petition to the ITC on April 26, 2017. The petition triggered an investigation by the ITC,
.. pursuant to section 202 of the Trade Act of 1974 to determine whether crystalline silicon photovoltaic cells (whether or not partially or fully assembled into other products) are being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported articles.
SolarWorld, a German company with a manufacturing operation in the U.S. that also filed for insolvency joined Suniva as a co-petitioner in the anti-dumping case in May.
The opposition to the petition is an unlikely coterie that could be the very definition of “politics makes strange bedfellows.” Environmental groups and conservative free trade policy groups are companions in fighting the tariffs. Representatives of the emergent solar energy industry urged the ITC not to apply tariffs on imported solar cells, saying it would slam one of the fastest growing industries in the U.S., hurt blue-collar workers gaining from new jobs in rural communities and raise electricity costs on the growing number of consumers benefiting from falling solar prices. Much of that opposition is organized by the businesses, including contractors that sell and install solar energy systems who told the ITC that the companies’ failure in the U.S. had “nothing to do with imports.”
That said, and despite that there are a lot of low cost imported solar panels in the market, there are also a lot of jobs. Solar trade groups tout that “solar jobs last year grew 25%, contributing 1 out of every 50 new jobs created in U.S., and the industry has added more than 100,000 blue-collar jobs to the economy in the last five years.” And those jobs are at risk if tariffs are imposed.
A coalition of conservative groups including the American Legislative Exchange Council that support free trade have joined in opposition to solar tariffs.
A review of the official Witness List, including who has lined up on each side, is simply fascinating.
But that is just the beginning of the irony. According to Suniva’s Chapter 11 filing, it is 63% owned by Chinese firm Shunfeng, whose southeast Asia products would be subject to the higher tariffs sought in its ITC petition. And such is also true for SolarWorld AG headquartered in Bonn, which would find its non U.S. products subject to the requested tariffs.
Not to mention that a Chinese owned company and a subsidiary of a German company are seeking trade protections from the U.S. government?
“What was clear today is that two foreign-owned companies seeking U.S. government subsidies who disingenuously claim to represent solar manufacturing were on one side and the broader unified solar industry united on the other,” said Abigail Ross Hopper, Solar Energy Industries Association’s president and CEO. “We hope the ITC sees the petition for what it is.”
Additionally, the opponents who are emboldened by the new solar industry installation workforce further argue that these two foreign financiers “are looking for U.S government protection after receiving tens of millions of dollars in federal and state handouts” but failing to remain competitive with the fast changing industry.
The hearing Tuesday was part of the injury phase of the investigation. In this proceeding the ITC must find that increased imports were the substantial cause of the industry’s serious injury. The ITC will make a recommendation to the Trump Administration by November. And despite that Stephen Bannon who campaigned against “globalists” was no longer an Administration strategist as last week came to an end, it is a populist Administration that will be making the final decision.
You should follow this case that could have a dramatic impact on the solar industry, but not immediately alter your business plan on the remote chance that these tariffs will be imposed over the interests of blue collar jobs.