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Opponents Make 'America First' Case Against Solar Tariffs

Bloomberg logoBloomberg 6 days ago Daniel Flatley
Solar panels stand at the Enbridge Inc. Sarnia Solar Farm in Sarnia, Ontario, Canada, on Friday, July 21, 2017. The Sarnia Solar Farm, which became fully operational in the fall of 2010, was at the time one of the largest photovoltaic solar farms in the world. It was also Enbridge's first ever foray into solar energy, costing $400 million.:  © Bloomberg/Bloomberg  

(Bloomberg) -- Critics of imposing tariffs on solar panels used a signature policy priority of President Donald Trump to make the case that imposing that trade protection would be harmful to American businesses -- and they say it’s already having an impact.

Adopting the proposed tariffs "will hinder, not help, American manufacturing," Henry McMaster, governor of South Carolina, said during a hearing at the U.S. Trade Representative’s office Wednesday.

The Solar Energy Industries Association told members of a government panel that the threat of tariffs is already crimping demand for solar energy. If the issue is not resolved, it could have serious long-term effects, especially given the prevalence of cheap natural gas and wind energy.

"Solar demand destruction is already happening. 2019 and 2020 is what’s at stake here," said Michael O’Sullivan, senior vice president of NextEra Energy Inc. The tariffs that have been proposed would be too high to allow new utility-scale solar projects, he said.

The Trade Representative’s hearing will be used to help it come up with a recommendation to Trump on whether to impose tariffs on solar imports, and, if so, what kind of trade protection to apply. The U.S. International Trade Commission proposed that Trump set a tariff of up to 35 percent on imported solar panels. The all-day hearing including pleas from domestic installers, foreign supplier representatives and utilities that buy solar products.

Representatives of Suniva Inc. and SolarWorld AG, the companies that petitioned the U.S. government for the tariffs and quotas, argued the protection is necessary to protect the U.S. solar manufacturing industry, which has been harmed by a deluge of imports from foreign manufacturers, particularly from China.

Read More: U.S. Trade Panel Proposes Duties of Up to 35% in Solar Case

Suniva urged Trump to impose higher tariffs than what the independent ITC recommended.

"The Chinese government has made dominance of the international solar market a national priority," said Matt Card, Suniva’s executive vice president. "Unfortunately, the recommendations proposed by the commission are insufficient to remedy the serious injury to the domestic industry."

The issue has drawn together Republicans and Democrats that say protection would result in fewer U.S. jobs, because so many are dependent on installing solar panels. In addition, representatives of foreign governments, trade associations and companies asked for particular exemptions from the tariffs, if the administration agrees to impose them.

James Durling of Curtis Mallet, a lawyer for LG Electronics Inc., said imports from South Korea should be exempted from any tariffs being considered by the president.

"Korea is not China," Durling said, adding that the tariffs are being considered based on continuing imports from Chinese companies. "LG has supplied distinctive products and developed distinctive market niches."

Heesang Kim, an economic minister at the South Korean embassy, said that imports from the country account for only 6 percent of solar imports and should be excluded on the grounds that they do not present a threat to the domestic industry at that level.

Outside the trade agency’s offices, solar installers protested the idea, arguing that making solar panels more expensive threatens their livelihood.

"We’re one of the rare solar companies that has a residential and a commercial division," said Micah Gold-Markel, founder of Solar States in Philadelphia. "Commercial jobs have been put on pause. Prices have already risen as a result of a proposed tariff -- let alone once the tariff is enacted."

To contact the reporter on this story: Daniel Flatley in Washington at dflatley1@bloomberg.net. 

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Mark Drajem

©2017 Bloomberg L.P.

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