International Trade Agency Splits on Solar Tariffs
David Wagman | November 01, 2017
The U.S. International Trade Commission recommended tariffs on imported solar panels of as much as 35 percent during a hearing October 31. The agency will send its proposals to President Donald Trump, who faces a January deadline to make the final decision.
The tariff proposals are lower than requested by Suniva Inc. The Georgia-based manufacturer filed the trade case in April, and was seeking tariffs of 32 cents a watt for panel imports, about equal to the current average price. Some developers were stocking up on inventory in anticipation of higher costs and halting construction on projects because of pricing uncertainty.
A tariff of 30-35 percent would add as much as 11 cents to the cost, putting modules at roughly the same cost developers were paying in September 2016.
(Read "Cheap Solar Panels Are Causing Economic Harm, ITC Says.")
The Solar Energy Industries Association (SEIA) argued in hearings that the tariffs proposed by the petitioners violate the law. In a case using section 201 of the international trade law, SEIA said that any new tariff cannot exceed 50 percent of the value of the product as it enters the United States. The petitioner’s tariff proposal for cells was 125 percent ad valorem (in other words, a 25 cent tariff on cells valued at 20 cents) and the tariff for panels was 80 percent ad valorem (a 32 cent tariff on a 40 cent market price).
The ITC voted unanimously in September that U.S. solar manufacturers were being harmed by low-cost imports. It was divided on what to recommend to Trump, who can adopt one of the commissioner’s recommendations, do something else or nothing at all. The deadline for a decision is January 12.
In the October 31 meeting, ITC Chair Rhonda Schmidtlein proposed tariffs of 35 percent on solar panels and as much as 30 percent on solar cells. Two other commissioners jointly proposed a 30 percent duty on cells beyond 1 gigawatt (GW) of imports. In both cases, the duties would last for four years and fall at regular intervals. A fourth commissioner recommended import quotas of 8.9 GW for the first year, increasing by 1.4 GW annually over the same period.
Suniva called the proposals “disappointing.”
“The ITC’s remedy simply will not fix the problem the ITC itself identified, and with it, we’ll see very shortly the extinction of what remains of this manufacturing sector,” Suniva said in a statement.
Abigail Ross Hopper, president and CEO of the SEIA, said “The commissioners clearly took a thoughtful approach to their recommendations and it’s worth noting that in no case did a commissioner recommend anything close to what the petitioners asked for.”