The problems facing businesses who have to plan around the unpredictable vagaries of a president who governs by tweet – not to mention the hundreds of workers who rely on their employers – have been illustrated by the latest announcement made by beleaguered polysilicon manufacturer REC Silicon.
Only two days ago the Norwegian manufacturer was forced to cancel a fundraising exercise based on a private share placement because its stock price has been consistently lower than the level it was going to ask shareholders to pay.
The stock is suffering because the company manufactures its polysilicon in the U.S. and is currently denied full access to its main market in China because Beijing is punishing U.S. polysilicon in retaliation for tariffs imposed on Chinese panels imported by American developers.
Caught in the crossfire between President Trump and Xi Jinping, REC Silicon has been operating its Moses Lake production facility in Washington State at 25% production capacity this year and had planned the private share placement to cover $3.7 million in costs related to the partial shutdown.
The polysilicon manufacturer, which brought a temporary halt to production in mid May, warned at the time it would be forced to shutter the fluidized bed reactor operation on a long-term basis if Beijing and Washington could not find a compromise that reopened the Chinese market to U.S. imports by the end of this month.
With that deadline fast approaching, REC Silicon yesterday announced it would delay the full shutdown plan until July 15. Rather than indicating its earlier warning was a bluff, REC Silicon said the stay of execution was based on the hope a solution to the U.S.-China trade war might be found when representatives of the two nations meet for talks at the next G20 meeting, to be held in Osaka, Japan on June 28 and 29.
That hope, of course, leaves open a two-week window during which the social media threats could escalate and the REC board will be hoping any such development will mark no more than the brinkmanship that appears a characteristic part of the U.S. president’s negotiating technique.