NARUC expresses concern over dangers of strong trade action

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Over the last few years, solar has gone from a niche market in the United States to a truly mainstream power source. Of the many data points that show this, one is the level of interest that the Section 201 case is getting from both many segments of American society and the electricity sector.

Yesterday at its annual meeting in Baltimore the National Association of Regulatory Utility Commissioners advised the U.S. Trade Representative that it should “carefully weigh the harm” that strong trade action could have on both electricity consumers and the ability of states to reach renewable energy and greenhouse gas reduction goals.

The resolution is a formal response to a call from the U.S. Trade Representative on whether or not potential forms of trade action are in the public interest. And while the president himself, not USTR, will make the final decision as to the kind and level of duties, a number of federal agencies have taken interest in the case and will advise the president.

In the resolution NARUC does not dispute ITC’s finding of injury, but warns of the potential damage of higher prices, including citing GTM Research’s warning that the potential market for PV could be cut roughly in half over the next four years if SolarWorld and Suniva’s recommended trade remedies are imposed.

As an association of regulators charged with ensuring reliable and affordable electricity, NARUC also warns about effects on electricity prices. “NARUC is concerned that at least some of the requested trade protections could significantly increase the price of solar panels and therefore the cost of solar electricity generation,” reads the resolution. “Higher costs will likely be borne by customers and achievement of policy goals may be impeded.”

NARUC is the latest body to come out with a statement against strong trade action, which follows on editorials in a number of major U.S. publications, including Washington Post, Wall Street Journal and the Los Angeles Times.

 

Cheese, whiskey, silicon and protectionism

As a decision by the Trump Administration on the Section 201 case looms, trade lawyers have warned Bloomberg that China, South Korea and other nations could impose retaliatory tariffs on imports of cheese and bourbon.

This would not be the first time that this has happened. In addition to the WTO-sanctioned retaliatory tariffs after the last Section 201 case in 2002 over imported steel,  following on the imposition of tariffs on Chinese solar in 2012 the nation responded with heavy tariffs on U.S. and EU polysilicon.

This shut Hemlock Semiconductor and REC Silicon’s U.S. production out of what is by far the largest global market for polysilicon, with severe results for these businesses.

Despite these concerns, the likelihood of significant trade action by the Trump Administration appears as high as ever. Axios has printed part of a statement by Trump Administration energy advisor George David Banks from the Conference of the Parties event in Germany, which indicates that the administration continues to support such a course of action.

“The United States has been helping finance the deployment of renewable energy technologies, but it’s essentially a jobs program for China and other countries,” claimed Banks.

“Is having a vibrant solar manufacturing industry in the U.S. national interest? I think we would say yes, it is in the national interest.”