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In This List

US refuses EU request for softer solar tariffs

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US refuses EU request for softer solar tariffs

The U.S. refused to soften restrictions on imported solar cells and panels from the European Union, which had requested modifications to tariffs President Donald Trump approved in January on the grounds that shipments from EU member countries have not caused "serious injury" to American companies.

Trump imposed the tariffs on solar power equipment after U.S. manufacturers Suniva Inc. and Solarworld Americas Inc. said they were unable to compete with foreign companies. Rather than target countries that allegedly committed trade violations, Suniva and SolarWorld sought restrictions on all imports. Trump ultimately excluded a number of developing countries.

In consultations with American officials, the EU pushed for alternatives such as country quotas or a minimum import price, arguing that the volume of shipments from the block is too low and the price of its equipment is too high to have hurt U.S. manufacturers. However, "the United States did not agree with us," according to a joint U.S.-EU statement that was filed with the World Trade Organization.

SNL Image

Installers from California Green Design install solar electrical panels on the roof of a home in Glendale, Calif.
Source: Associated Press

Separately, Germany-based SolarWorld Industries GmbH, which took over the manufacturing operations of SolarWorld America's bankrupt parent company, SolarWorld AG, is asking the U.S. to exempt its solar power products from the tariffs, which are "manufactured under the higher standards of the European market" and comply with German and European regulations and standards.

While SolarWorld Americas previously argued for restrictions on all imports, SolarWorld Industries said exempting its products would not "interfere with the well-understood interest of U.S. manufacturers in growing and prospering the U.S. market. Quite the opposite, it stands to reason that our products could help strengthen the quality market segment in the U.S. and diminish the dominance of Chinese products in the U.S. market."

SunPower Corp., which is based in California but manufactures solar cells and panels outside the U.S., is also seeking an exemption from the tariffs, as is China-based JinkoSolar Holding Co. Ltd., which said its plan to open a panel assembly plant in Jacksonville, Fla., could be jeopardized by the duties.

SunPower Chairman, President and CEO Thomas Werner told Reuters that exempting its premium, high-efficiency line of panels from the tariffs would allow the company to "materially" reverse its decision to delay a $20 million plan to expand employment and could pave the way for it to manufacture a cheaper line of panels in the U.S.

CreditSights analysts said SunPower "is one of the most negatively exposed names" to the solar tariffs since it manufactures abroad but most of its revenue comes from the U.S. The company blamed the tariffs for its decision in February to lay off up to 250 nonmanufacturing employees.

The tariffs do not apply to the first 2,500 MW of solar cells imported to the U.S. annually. In February, Credit Suisse identified 4,450 MW of demand for tariff-free cells in 2019, far in excess of the 2,500-MW quota.

Without an exemption, JinkoSolar believes that its next-best option would be to pay tariffs to import foreign-made panels, Credit Suisse analyst Maheep Mandloi said. JinkoSolar in January said it signed a contract to supply approximately 1,750 MW of solar panels to a U.S. buyer over roughly three years.

JinkoSolar requested an exemption based on "the lack of domestic manufacturing and of an acceptable domestic substitute" and argued that an exclusion would further the goals of Trump administration trade policies by creating investment in advanced U.S. manufacturing along with high-paying new jobs.