On the campaign trail U.S. President Donald Trump famously said that he would pull the United States out of global trade deals and renegotiate the terms. Today, bankrupt solar manufacturer Suniva filed a legal petition that could allow him to circumvent those agreements, as least for solar products.
Suniva Inc., which filed for bankruptcy slightly more than a week ago, has filed a petition under Sections 201 and 202 of the Trade Act of 1974. This petition calls for “global safeguard relief” from imports of crystalline silicon solar PV cells and modules, which it says have driven the company to bankruptcy.
If the U.S. International Trade Commission (ITC) approves the petition, the agency will recommend to U.S. President Donald Trump the form of “relief or remedy” to adjust the industry to the import competition, but President Trump will get to make a final decision as to what action to take.
Suniva isn’t waiting for ITC to make a recommendation, and instead offered a request that President Trump impose four-year minimum import price on PV modules and cells, starting in year one at $0.78 per watt for modules and $0.40 for cells. This is roughly double the prices for pv modules that pv magazine staff overheard in conversations at the Bloomberg New Energy Finance Future of Energy Summit two days ago.
It is important to note that while international trade agreements prevent most protectionist measures, Section 201 provides a loophole, which is spelled out according to Article 19 of the General Agreement on Trade and Tariffs. Here’s how ITC describes it:
Article XIX of the GATT is sometimes referred to as the escape clause because it permits a country to “escape” temporarily from its obligations under the GATT with respect to a particular product when increased imports of that product are causing or are threatening to cause serious injury to domestic producers.
The news of the Section 201-202 petition comes shortly after the United States imposed new tariffs on softwood lumber from Canada. This sugguests that the Trump Administration, while no fan of solar, is willing to impose strong import restrictions even on nations considered close allies.
However, China, which produces the bulk of the world’s PV cells and modules, has shown that it is also willing to take equally strong action on trade against the United States. Sharp import duties on U.S. polysilicon, widely seen as retaliation for U.S. duties on solar cells, have decimated the U.S. polysilicon industry.
But the actions will likely not be limited to China. Section 201 allows for a “global safeguard”, and a Suniva press release alludes to the movement of Chinese PV makers to Southeast Asia. “Manufacturing has expanded to other countries, particularly in Asia, and increasing imports fueled by a growing global manufacturing overcapacity have caused U.S. market prices to fall to levels that challenge responsible economic operations for U.S. manufacturers,” states Suniva.
Suniva’s petition has already drawn reactions from both SEIA, which opposed previous trade cases against China and Taiwan, as well as SolarWorld, which petitioned for these cases.
“While we have not had a chance to fully review Suniva’s petition to the International Trade Commission, we strongly urge the federal government to find a resolution that bolsters the competitiveness of American solar cell and panel manufacturing, which employs approximately 2,000 people in the U.S., without erecting new trade barriers,” reads a statement from SEIA CEO Abigail Hopper.
SolarWorld’s response also sounds a cautious tone. “The case of Suniva dramatically demonstrates that the U.S. solar manufacturing industry still suffers from unfair trade,” reads a statement from SolarWorld USA President Juergen Stein. “SolarWorld – as the largest U.S. crystalline-silicon solar manufacturer, with more than 40 years of U.S. manufacturing experience – will assess the case brought by Suniva but prefers that any action to be taken against unfair trade shall consider all parts of the U.S. solar value chain.”
pv magazine will provide more information and analysis on this story as it becomes available.
Update 12:17 PM EST: This article was updated to include a statement by Suniva.