U.S. Trade Panel Backs Solar Tariffs

By Erin Ailworth Features Dow Jones Newswires

Federal trade officials are recommending that the Trump administration impose a tariff of up to 35% on imported solar panels to protect U.S. solar manufacturers from low-priced foreign products that have undercut the companies' ability to compete.

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Members of the U.S. International Trade Commission outlined their various recommendations Tuesday, which also included import quotas and a licensing fee. They must now send them to the White House, which has until January to decide what, if any, actions to take.

The recommendations come several months after two embattled solar panel makers, Suniva Inc. and SolarWorld Americas Inc., petitioned the ITC for a tariff on imported solar cells, the piece of equipment in a solar panel that converts sunlight to electricity. Suniva and SolarWorld had also sought either a floor price on solar modules, or a quota on imported cells and modules in order to help domestic manufacturers gain more market share.

On Tuesday, a majority of trade commissioners recommended the president implement tariffs on imported solar panels and cells. But the size of the tariffs varied, and fell short of both the 25-cent per watt tariff Suniva and SolarWorld had requested on cells, and the 32-cent per watt tariff they'd requested on panels.

Suniva said it is grateful the ITC sees the need for solar trade protections but felt the recommendations outlined by commissioners Tuesday "simply will not fix the problem the ITC itself has identified, and with it, we'll see very shortly the extinction of what remains of this manufacturing sector, and the jobs of American workers."

The case has divided the solar industry. While some panel makers say they need protection against a flood of underpriced imports, panel installers and others in the solar industry counter that a tariff would raise prices for consumers and hurt demand for solar arrays that were made more affordable by cheap imports. Both sides have claimed thousands of American jobs are on the line.

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Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, a trade group that has opposed the petition, said she was heartened that the ITC recommendations fell short of what the companies had requested, but still felt they would be "intensely harmful" to the broader U.S. solar industry.

"We remain committed to working with all parties to find a solution that supports domestic cell and panel manufacturing without cratering demand for American-produced solar energy," she said.

Suniva brought its petition under a rarely used provision of U.S. trade law -- Section 201 of the U.S. Trade Act of 1974 -- that allows an industry to seek broad protection from a surge of imports if that surge has caused the industry serious injury.

The last time the ITC handled such a case before this year was in 2001, when it decided steelmakers qualified for safeguard relief. That ruling prompted the George W. Bush administration to impose tariffs and quotas on $17 billion of imported steel. The World Trade Organization later determined the restrictions violated global trading rules, and the U.S. removed the safeguards.

Mr. Trump campaigned on a promise to be more aggressive in using U.S. trade laws. That has encouraged industries to seek relief under Section 201. In addition to the solar case, Whirlpool Corp. is seeking relief from washing machine imports. The ITC is expected to issue relief recommendations in that case in November.

--Jacob M. Schlesinger contributed to this article.

Write to Erin Ailworth at Erin.Ailworth@wsj.com

(END) Dow Jones Newswires

October 31, 2017 15:13 ET (19:13 GMT)