President Donald Trump has not weighed in on the case so far, though his administration has re-opened the landmark NAFTA agreement with Mexico and China. | Saul Loeb/AFP/Getty ImagesShare on Facebook Share on Twitter
A federal trade panel declared Friday that surging imports of solar panels have hurt U.S. manufacturers — a decision that will allow President Donald Trump to penalize Chinese companies but could also choke off the fast-growing green energy industry in the U.S.
The U.S. International Trade Commission voted to uphold a complaint brought by two domestic solar manufacturers that complained that the low-cost imports had damaged their businesses. The decision was opposed by the much larger U.S. solar installation industry, which has seen the influx of the cheap panels spark a boom in construction of giant solar farms and rooftop systems around the country.
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The issue will give Trump the opportunity to erect trade barriers he has hailed as key to his strategy to revive domestic manufacturing, and at the same time hit the Chinese companies that have largely evaded previous U.S. import penalties to become the leading suppliers of solar cells and panels. Administration officials say the trade case hasn’t been a central one for the president, but they are increasingly confident Trump will favor tariffs when the commission sends the White House its recommendations in the next couple of months.
The case could also give Trump a platform to advance his “America First” agenda and tout his effort to revive the ailing coal sector. Coal companies have complained that the Obama administration waged a regulation-heavy “war on coal” while tilting federal tax incentives and loans to renewable energy sources in order to advance climate change policies.
“[Trump] could easily reward his buddies in the coal industry who would really like to see high-priced solar panels competing with coal for space on the grid,” said Clark Packard, a policy analyst and trade lawyer with the conservative think tank R Street Institute, which opposes tariffs. He added: “He may just want to stick it to people — your coastal elites who never would have voted for him who are more likely to use solar panels. He’s looking for any circumstance to impose tariffs, it doesn’t seem he cares what they are.”
Trump has not weighed in on the case so far, though his administration has re-opened the landmark NAFTA agreement with Mexico and China, and he has regularly blasted China and other countries for what he calls unfair trade with the U.S.
“He’s a protectionist, there’s no doubt about it, and he’s not very sympathetic to the renewable energy,” Gary Hufbauer, senior fellow for the Peterson Institute of International Economics. “As much as you can predict any president, I think his conclusion is foregone.”
The complaint brought by Georgia-based Suniva and Oregon-based SolarWorld USA has brought sharp opposition from most of the U.S. solar industry, which has seen its growth skyrocket as costs for the technology fell to a fraction of what they were a decade ago. Aided by federal tax incentives and state-level programs, large solar power installations have sprung up across the country, driving down costs for those plants to levels that are now competitive with coal and natural gas power power stations. That’s lifted employment in the sector to 260,000 even as the number of U.S. companies that make solar cells and panels sinks.
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The solar industry has warned that high tariffs would eliminate 88,000 U.S. jobs by boosting costs and making many projects uneconomic just as the industry, which generates $29 billion in revenues, was starting to stand on its own.
“If companies are going to be injured, we’re going to be bringing in employees who will lose their jobs, mayors and governors and senators and representatives,” said Abigail Ross Hopper, head of the Solar Energy Industries Association. “We’re going to be making sure folks understand the impact, and putting a human face to it.”
The four members of the ITC will now begin to formulate a remedy to address the injury suffered by the U.S. manufacturers, and they will take recommendations from solar companies. Any remedies taken by the U.S. will not apply to imports from Canada.
Suniva brought the case under Section 201 of the Trade Act, a rarely used but powerful tool that gives the president the ultimate authority to take or discard the recommendations of the commission. Most trade complaints — including two solar cases acted upon by the Obama administration — are limited to imports from specific countries, but Section 201 allows the president to impose tariffs on all imports of a product. The authority was last used by President George W. Bush in 2002 to implemented a tariff on imported steel, but it was withdrawn 15 months later.