September 25, 2017 Read More →

Trade-Case Decision Leaves Trump in a Position to Gut U.S. Solar Industry

Politico:

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.

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.

In a statement, the White House said Trump would make a decision that “reflects the best interests of the United States,” and it praised the solar-makers, saying the domestic “solar manufacturing sector contributes to our energy security and economic prosperity.”

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 reopened the landmark North American Free Trade 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.

More: Trade panel puts solar tariff decision in Trump’s hands

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