U.S. solar-panel makers Friday won backing from a government commission in their bid for protection from imports, handing the Trump administration fresh ammunition in its quest to ramp up trade enforcement policies against foreign competition.
The International Trade Commission voted 4-0 to approve a request from the domestic solar-panel industry seeking relief under a little-used trade law that allows American companies to win government protection if they can show they suffered "serious injury" from a surge in imports.
The ITC members will next consider what specific policies they believe should be implemented. That recommendation will be sent in November to the White House, which would then be required to make a decision by early next year on whether to impose import limits.
The White House issued a statement saying that President Donald Trump would await the ITC's recommendations, "which can inform his final determination." The statement didn't say whether Mr. Trump favored imposing new import barriers, but suggested that officials would look favorably at measures designed to shore up domestic production, saying "the U.S. solar manufacturing sector contributes to our energy security and economic prosperity."
Prior administrations have rejected similar import restriction recommendations from the ITC, saying that broader economic and national security concerns outweighed the complaints of the domestic industry. But Mr. Trump has, in general, suggested he would take a more sympathetic stance toward requests for protection, and officials have said they would consider invoking the little-used "safeguard" law more frequently in a bid to take a more aggressive stance on trade enforcement.
The solar industry had requested protection under the long-dormant Section 201 of the 1974 trade law. Friday's vote was the first time the ITC had weighed such a petition since 2001. In that case, officials approved a request for relief from the steel industry, and the George W. Bush administration imposed tariffs the following year. Those were eventually removed after the World Trade Organization concluded the protections violated global trading rules.
After a 16-year hiatus, the law is now gaining new attention as Mr. Trump has vowed to dust off old trade laws to consider curbing imports.
The ITC is scheduled to vote on another Section 201 petition from washing-machine makers on Oct. 5.
The trade case has sharply divided the U.S. solar industry, with some panel makers arguing that they needed protections against a flood of underpriced Asian imports, and panel installers countering that a tariff would raise prices for American consumers and make solar ownership less attractive.
Suniva Inc. first petitioned the ITC to levy a 40-cents-per-watt tariff on imported solar cells in April, shortly after the company filed for bankruptcy protection. It also asked the commission for a minimum price of 78 cents a watt, including the 40-cent tariff, on solar panels made by foreign manufacturers.
The company is based in Georgia, but is majority owned by Shunfeng International Clean Energy Ltd., a company based in Hong Kong. SolarWorld Americas Inc., an Oregon-based firm whose German parent filed for insolvency earlier this year, later became a co-petitioner.
Both companies have blamed their financial troubles on Asian rivals dumping cheap solar panels into the market, pushing down prices in recent years. A report issued in August by staff at the ITC said nearly 30 U.S. solar production facilities have been closed since 2012.
Trade protection, Suniva and SolarWorld say, would boost domestic solar-panel makers and force overseas competitors to open plants in the U.S. That activity could lead to more than 100,000 new jobs across the industry, the companies said.
Without it, "we will be extinct," said Matt Card, Suniva executive vice president of commercial operations.
But the majority of the U.S. solar industry opposed the petition, particularly solar installers, who have seen the adoption of rooftop solarjump as prices for panels fell because of low-cost imports from Asia.
In the past five years, the total cost to install solar has fallen nearly 70%, even before federal subsidies are factored in, according to the trade group Solar Energy Industries Association, or SEIA.
SEIA says a tariff on imported cells is likely to hurt demand for solar in the U.S. as equipment becomes more expensive, and could cause the sector to shed 88,000 jobs nationwide. That's one-third of the current U.S. solar-industry workforce.
Both sides lined up powerful allies as they tried to influence the commission's final decision.
Conservative free-trade policy organizations, including the American Legislative Exchange Council and the Heritage Foundation, have come out against a tariff, as has a bipartisan group of 16 senators and 53 congressmen.
Earlier this week, a group of retired and former U.S. military professionals wrote the ITC to say they were "deeply concerned the petition's proposed trade remedy would be harmful to the national and energy security efforts of the U.S. Department of Defense."
Meanwhile, the Coalition for a Prosperous America, a group that lobbies against free trade, supported Suniva's proposed tariff, as did the Steel Manufacturers Association and the Alliance for American Manufacturing.
The U.S. solar market "would be well served by vibrant domestic competition rather than an overreliance on imports from China," said the Alliance for American Manufacturing, which came out in support of the tariff last week.
(END) Dow Jones Newswires
September 22, 2017 12:53 ET (16:53 GMT)