America First: Will Protectionism Cripple the Solar Industry in the United States?

by: Joshua Drake, Staff

The Trump administration has ordered a 30% tariff on solar equipment manufactured abroad. This decision falls in lock-step with President Trump’s much touted “America First” agenda, which included rallying against China’s unfair trade practices during his 2016 campaign.

Sunvina Inc., a bankrupt US solar manufacturer, and Solar World, a bankrupt German manufacturer based in the US, respectively, both asserted that practices by foreign solar manufacturers violated Section 201 of the 1974 Trade Act.

The nuances of whether Sunvina or Solar World are in fact a domestic industry is debatable, however the International Trade Commission (ITC) recommended that the Trump administration impose a 10-35 percent tariff on solar products.

In the US, the solar industry employs around 260,000 people. Market intervention could have potential negative impacts on the industry, as the Solar Energy Industries Association (SEIA) lobbied against the Trump administration in their decision.

It is important to note however that former Vice President Al Gore has come out in support of the Trump administration’s actions, pointing to unethical practices of Asian solar manufacturers price gauging their products, which in turn hurts the US solar industry.

Further, Sunvina and Solar World argue that the imposition of these tariffs will create new opportunity for US-based solar manufacturers in order to increase their market shares. A consultant for Solar World has gone on the record to predict job increases between 12,000 and 45,000 in US-based solar manufacturing with the tariffs.

However, the SEIA is not convinced. The SEIA is more concerned about basic supply and demand principles that control the market. When the install costs go up, the demand will go down–creating serious concerns about the need for more solar production, sales, and installation personnel.

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