solar panels

Solar panel imports to the US could be hit with tariffs under Trump plans

Emergency “safeguard” tariffs may be placed on solar panels imported into the United States under new plans by the Trump administration designed to protect domestic industries.

A filing sent to the other 163 members of the World Trade Organization (WTO) earlier this week showed that the measures were being considered.

The move raises the stakes in a global battle to dominate the solar power industry, which has grown explosively in the past five years. As production has increased, prices have tumbled, favouring producers who can take advantage of economies of scale.

The US, China and India are vying to be the market leader and are looking out for any perceived breach of the international trade rules by their rivals.

Last September, the WTO ruled that India was illegally discriminating against US solar exports, while India launched its own WTO complaint about solar subsidies in eight US states.

The ability for the US to attract renewable energy investment has been tarnished by the shift in energy policy under President Donald Trump, putting China and India on top, a report by British accountancy firm Ernst & Young said earlier this month.

The US decision to consider safeguard tariffs follows a petition to the US International Trade Commission (ITC) by Suniva, the filing said.

Under WTO rules, such temporary tariffs may be used to shield an industry from a sudden, unforeseen and damaging surge in imports. They can be challenged by other WTO members.

The ITC will decide by 22 September whether the US industry has suffered “serious injury” and if that is the case it will submit its report to Trump by 13 November, the filing said.

Suniva’s petition said the volume of imports rose by 51.6 per cent between 2012 and 2016, while the value of those imports grew by 62.8 per cent from $5.1bn to $8.3bn (£4bn - £6.5bn).

“The petition alleges that increasing imports have taken market share from domestic producers and have led to bankruptcies, plant shutdowns, layoffs and a severe deterioration of the financial performance of the domestic industry,” the US filing said.

Suniva itself filed for Chapter 11 bankruptcy on April 17.

While imports have risen, US producers have seen business shrivel, with 1,200 manufacturing jobs lost and a 27 per cent wage decline in the four years to 2016. US solar cell plants went from running at 81.7 per cent of capacity in 2014 to 28.9 per cent in 2016, the filing said.

“Data in the petition also indicates that (US producers’) domestic market share fell from 21.0 per cent in 2012 to 11.0 percent in 2016, despite a $4bn growth of the US market over the same period.”

Last year, data showed that solar panels generated more electricity in the UK in 2016 than coal. 

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