Trump levies graduated tariffs starting at 30%, exempts 2.5 GW in cells

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On Monday night U.S. Trade Representative Robert Lighthizer announced that President Trump has decided to impose safeguard tariffs on solar module and cell manufacturers for the next five years, starting at 30% and ending at 15% in Year 4.

Neither Mexico nor Canada will be exempt from these tariffs and a statement by the U.S. Trade Representative said nothing about Singapore, which the International Trade Commission recommended to be exempt from global trade sanctions.

The decision also exempts 2.5 GW of cell imports per year, which could keep around 14 U.S. solar module manufacturers identified by pv magazine in business. No current U.S. crystalline silicon solar manufacturing facility currently produces its own cells, with the exceptions of Panasonic (at the Tesla Gigafactory in Buffalo) and SolarWorld.

Interestingly, the statement says the United States will continue discussing long-term solutions with interested parties that could resolve the separate antidumping and countervailing duty measures imposed on Chinese solar products as a result of previous trade complaints brought by SolarWorld in 2012 and 2014, and retaliatory Chinese import duties on which have crippled the U.S. polysilicon industry.

“While I would have preferred to see the Trump Administration not impose any sanctions on foreign module manufacturers, which would have preserved the solar industry in its current form, the tariffs he decided to impose may slow, but will not stop the U.S. solar industry,” said Tony Clifford, chief development officer, Standard Solar. “The solar industry has come through worse policy decisions and will come through this one, too.”

“The solar industry is nothing if not resilient, and I’m confident the innovative, tough and resourceful members of the industry will find workarounds to the latest obstacle placed in solar’s path,” Clifford said. “The Solar Century is here, and not even unfair tariffs will stand in its way.”

MJ Shiao, the head of Americas research at GTM Research, has stated that he sees nothing to suggest that the base for the tariffs will be based on previous years’ prices, as SolarWorld and Suniva had requested. As such, tariffs on modules are expected to be around $0.10 per watt for the most common modules based on multicrystalline silicon cells.

At least one U.S. project developer believes the tariff numbers had been widely anticipated by the market and that the effects will be minimal.

“We do not expect the temporarily higher prices of some modules to diminish the rapid growth of new development opportunities in the United States,” said Doran Hole, ReneSola’s Chief Executive Officer of North America and Group Vice President of Strategy. “Community solar and rooftop distributed generation are two examples of the burgeoning activity we are pursuing. As module prices continue to decline over time, we expect to see accelerating activity in those segments.”

Update: In addition to multiple updates on January 22, this article was updated on January 23 at 8:25 AM to  clarify the basis of pricing of the tariffs and exemptions.

Update: This article was updated on January 23 at 9:18 am to add Renesola’s comments.