By - Jim Vess

Solar cell imports face trade commission recommendations for tariffs and quotas

Energize Weekly, November 8, 2017

Imported solar cells and modules could be subject to new trade controls—including licensing fees, quotas and tariffs—under proposals U.S. trade officials are making to President Donald Trump.

The members of the International Trade Commission (ITC) made the recommendations in a case brought by two bankrupt solar panel manufacturers—Norcross, Ga.-based Suniva Inc. and Hillsboro, Ore.-based SolarWorld.

The two argued that cheap imports, primarily from Asia, had undermined the domestic industry. The case was filed under a portion of U.S. trade law, Section 201, in which the complainants did not need to show a violation of trade rules, but only harm to the domestic industry.

After written filings and a hearing, the ITC ruled unanimously that imports had undermined domestic manufacturers.

Section 201 gives the president broad powers to impose sanctions. The ITC recommendations will go to Trump by Nov. 13, and he will have 60 days to make a decision.

Suniva and SolarWorld had proposed stiff tariffs, a floor on the price of imported solar cells and modules, as well as a tight quota on imports.

The Solar Energy Industries Association (SEIA), an industry trade group opposing the Suniva petition, estimated that tariffs on the scale called for by Suniva would lead to the loss of 88,000 jobs, about a third of all jobs in the sector.

The remedies proposed by the trade commissioners, which they said should be in place for four years, were less drastic.

The most stringent recommendation came from ITC Chairman Rhonda Schmidtlein, who proposed a first-year quota of 0.5 gigawatts (GW) on cells with a 10 percent tariff. Cells above the cap would face a 30 percent tariff. Over time, the quota would be raised and the tariff “incrementally reduced.”

On modules, Schmidtlein, a Democrat appointed by former President Barack Obama, called for a 35 percent tariff that would gradually be reduced.

The most moderate proposal came from Commissioner Meredith Broadbent, a Republican also appointed by Obama. She suggested capping imports at 8.9 GW a year and then increasing that amount by 4.2 GW over the four years.

SolarWorld had sought import quotas of 0.22 GW for cells and 5.7 GW for modules, with the caps easing over time.

Broadbent also proposed a licensing fee that would be sold at auction for a penny a watt. This would net the government about $89 million the first year and $14 million in each of the following three years. SEIA, which opposes tariffs, had suggested a licensing fee.

David S. Johanson, the commission vice chairman and an Obama Republican appointee, and Irving A. Williamson, a Democrat appointed by former President George W. Bush,  jointly recommended a 30 percent tariff on imports of solar cells in excess of 1 GW, as well as a 30 percent tariff on modules. Each penalty would be gradually lowered in the next few years.

Suniva was not happy with the recommendations. “The ITC’s remedy simply will not fix the problem the ITC itself identified, and with it, we’ll see very shortly the extinction of what remains of this manufacturing sector,” the company said in a statement.

“Suniva calls on President Trump to implement the remedy recommendations as submitted by Suniva and SolarWorld, reject the ITC’s weak remedy recommendation,” the Suniva statement said.

The SEIA saw the recommendations as a limited victory. “The commissioners clearly took a thoughtful approach to their recommendations and it’s worth noting that in no case did a commissioner recommend anything close to what the petitioners asked for,” Abigail Ross Hopper, the association’s president and CEO, said in a statement. “That being said, proposed tariffs would be intensely harmful to our industry.”

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