Unlike earlier trade actions which targeted solar imports from China, and later China and Taiwan, the global nature of the Section 201 tariffs meant that there weren’t many places you could relocate your factory and get away with importing modules tariff-free into the United States.
There weren’t many; but there were some. The Section 201 tariffs carry exemptions for several dozen developing nations that are part of the Generalized System of Preferences (GSP) list, as long as imports from any those nations do not exceed 3% of the total imported during any year, and together they do not exceed 9%.
And while Thailand and the Philippines were not included in this list as they already supplied more than 3% of PV imports, one nation on this list was promising: Turkey.
Over the last few years, Turkey has become a minor PV manufacturing destination, with several local manufacturers including Ankara Solar and CW Enerji joining China Sunergy, Chinese PV maker HT-SAAE commissioning a 600 MW cell and module fab in 2017, and EkoRE having an 850 MW mega-factory in the works.
At the time of writing, it was not clear how many of the nation’s cells and modules were making their way to the U.S. market, but what is clear is that this was over as of last week, as Turkey was formally removed from the GSP on May 17. From the Federal Register:
Those contractors working in the U.S. solar market and wishing to source modules overseas and not pay tariffs will now be competing for the limited supply from Algeria, Brazil, India and Tunisia.
The price of economic success
While the removal of Turkey from the GSP does hit those importing PV modules, this was not necessarily the aim of the Trump Administration.
GSP, which was established in 1974, is intended for under-developed nations. And even though Turkey still has a per-capita GDP of less than $10,000, the World Bank calls the nation’s economic and social development in the past two decades “impressive”, with poverty incidence falling by more than half from 2002-2015.
As such, the World Bank now describes Turkey as an “upper-middle-income country”, and it may be this economic success alone that determined the change.