Inverters from China to be spared 25% tariffs – for at least 90 days

Enphase, Huawei and other companies which make inverters in China may be the beneficiaries of a compromise struck between Presidents Donald Trump and Xi Jinping.

December 3, 2018 Christian Roselund

Image: The White House, public domain

It’s a tentative deal, based on multiple conditions. But according to a statement by the White House, if U.S. President Donald Trump and Chinese President Xi Jinping can reach a deal on “structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture” in the next 90 days, Section 301 tariffs on $200 billion worth of products made in China will stay at 10%.

As confirmed by trade expert John Smirnow, the general counsel and VP of market strategy at Solar Energy Industries Association (SEIA), this includes inverters.

As an interim measure, President Trump has agreed to leave tariffs on these products at 10% on January 1 instead of increasing them to 25% as planned, and the 10% rate will last for the 90-day duration of the negotiating period. This could be a critical period of time for some manufacturers like Enphase which are in the process of shifting prouction to new locations outside of China.

Enphase has previously stated that its contract manufacturing partner Flex will begin producing microinverters in Mexico during the second quarter of 2019.

However, White House Press Secretary Sarah Sanders has stated that if both parties fail to come to an agreement – which is not inconceivable, given the nature of what is being discussed – the 10% will increase to 25%.

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