EU, China request consultation with US over solar tariffs

Following the introduction of 30% graduated tariffs on U.S. imports of solar cells and modules, the European Union and China have joined South Korea and Taiwan in filing a complaint with the World Trade Organization.

February 8, 2018 Ian Clover

Image: World Trade Organization

The European Union (EU) and China have this week lodged separate filings with the World Trade Organization (WTO) that seek consultation with the United States over the imposition in January of tariffs on imported crystalline silicon solar cells and modules.

The EU’s request for compensation follows similar measures lodged over the past two weeks by Taiwan and South Korea, all of which take issue with U.S. President Trump’s safeguard tariffs, which apply a graduated 30% tax on imported solar cells and modules over the next five years, reducing sequentially on an annual basis and ending at 15% in 2022.

While the Trump Administration’s restrained approach surprised some industry players – particularly the exemption from tariffs of 2.5 GW solar cell capacity each year – the levy still raised the hackles of leading solar-producing regions globally.

The EU is no longer a major player on the PV production stage, but Germany in particular remains a major exporter of solar panels and cells. While the EU, much like China, Taiwan and South Korea, does not accuse the U.S. of breaking WTO rules, it is seeking a consultation with the hope of securing compensation for potential damages the tariffs may cause, such as loss of revenue.

The WTO filing reveals the EU’s eagerness to hold consultations “as soon as possible” with “the participation of representatives of the U.S.’s investigating authorities”.

China’s claim for compensation is virtually identical, setting a consultation date for February 9 or 12. China, unlike the EU, is the dominant source of PV component production globally, and stands to lose more from the tariffs than other regions. Some of China’s largest solar firms have begun assessing alternative supply strategies, with JinkoSolar – the largest Chinese solar company in terms of shipments – recenlty confirming that it will invest $140 million to build a production facility in Florida.

Last year, the United States made a similar request via the WTO to complain about India’s alleged protectionist practices; a case that the WTO found in India’s favor but which did, however, spark a series of tit-for-tat filings between the two nations that are still ongoing.

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