By Alex Tellez

The recent debate over the newly-approved ‘trade remedies’ on solar imports has U.S. citizens polarized. The solar market has become the subject of another green energy versus conventional energy, left versus right, progressive versus status quo dispute.  However, upon further investigation, the roots of these opposed sides tangle in a muddy field; the political platforms to which citizens cling collapse under scrutiny.

Review of the events

• Last year, two US solar manufacturers, Suniva and SolarWorld Americas, petitioned the U.S. International Trade Commission (ITC) to implement tariffs on international CSPV imports under section 201 of the 1974 Trade Act to relieve them of “trade injury” so they can remain competitive in the domestic solar market.
• In May of 2017, the ITC began its investigation into the claims of injury.
• In September of 2017, the ITC unanimously “determined that increased imports of crystalline silicon photovoltaic cells […] are being imported into the United States in such increased quantities as to be a substantial cause of serious injury to the domestic industry producing an article like or directly competitive with the imported article”
• In October, the ITC voted on “remedy recommendations” that were then submitted to President Trump in November.
• On January 17, the President and CEO of Solar Energies Industry Association (SEIA) sent a letter to the president warning him that the ITC’s “recommendation will lead to the layoff of tens of thousands of workers, cause companies to stop investing in the United States and bring an American economic engine screeching to a halt.”
• On January 23 of this year, President Trump announced his decision to impose tariffs in accordance with the ITC’s recommendations. According to the parameters outlined in the federal register, as of February 7 of this year, a 30% duty was imposed on all components of crystalline silicon photovoltaic cells (CSPV) from most countries (various developing nations excluded) which will decrease by 5% each subsequent year. Tariffs will expire on February 6 of 2022.

What are the main arguments?

SEIA, the main lobbying firm for nearly 500 solar-related companies including manufacturers, suppliers, installers, and distributors, has largely fueled the heated debate. As was reported in the Washington Post, Abigail Ross Hopper, the CEO and president of SEIA, argues  that “Suniva and SolarWorld are the victims of mismanagement and that the foreign-owned companies are using U.S. trade laws to bail out their bad investments.” In a press release SEIA claimed that “[a]nalysts say Suniva’s remedy proposal will double the price of solar, destroy two-thirds of demand, erode billions of dollars in investment and unnecessarily force 88,000 Americans to lose their jobs in 2018.”

However, the ITC’s findings substantiate injury on behalf of cheap imports according to US code. As stated in the Commissions’ investigation report, “under the [Trade Act of 1974], the Commission considers whether “an article is being imported into the United States in such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to the domestic industry producing an article like or directly competitive with the imported article.”  Under section 202 of the Trade Act, imports have increased when the increase is “either actual or relative to domestic production.”  The findings and recommendations of the ITC are consistent with its statutory mandate. Trump claimed that he is saving solar jobs by approving these tariffs and that he envisions that these foreign manufacturers will establish operations in the U.S.; he claims he wants to bring jobs to America.

What does it all mean? Is there hope?

During the past month, my newsfeed has been teeming with emotional headlines, such as “Solar tariffs would kill jobs, harm environment,” “Trump slaps tariffs on foreign solar panels and washing machines,” and “Burned by Trump’s solar panel tax.” The use of these bellicose terms has effectively ignited fury towards Trump from environmentalists and the hundreds of thousands of workers in the solar industry who worry that their jobs are at risk.  Admittedly, I too was vexed by these headlines and found myself jeering at the audacity of the President who, as some journalists and bloggers suggested, would so unabashedly shelter conventional energy industries by spoiling the burgeoning solar market.

Though there is precedence for this sinister construal—President Trump has been very clear about his support of the coal industry—the fact that the supposedly impartial ITC unanimously sided with Suniva and SolarWorld challenges this interpretation of events.  The commission is a bipartisan agency currently comprised of two Republicans and two Democrats who were presidentially appointed. Chairman Rhonda Schnare Schmidtlein, a Missouri Democrat, was nominated by Barack Obama.  Their findings and recommendations merely follow from their congressionally-mandated mission. Additionally, in 2012 and in 2014, the ITC investigated similar cases and eventually recommended similar trade remedies that would impose antidumping tariffs on CSPV cell imports from China and Taiwan, the largest producers of solar parts. Obama approved these tariffs. The debate was just as embroiled then as it is now.  Headlines around that time expressed the same amount of outrage as they do today, but the anger was not attributed towards the President. Rather, headlines such as “U.S. slams Chinese solar panels with new tariffs,” “U.S. imposes tariffs on Chinese solar panels,” and  “U.S. Slaps Tariffs on Chinese Solar Panels” expressed resentment towards the U.S. Then it was a ‘U.S. problem,’ whereas today it is a ‘Trump problem.’

It is not yet clear how these new tariffs will affect the market for solar panels here in the U.S. Bloomberg reported that a resulting 3 percent higher cost for residential solar panels and 10 percent higher costs for solar farms will drive down domestic demand; some estimate that lower demand will decrease supply from, developers, installers, suppliers, etc., thus hurting solar jobs. However, some postulate that these tariffs—which are lower than those Suniva and SolarWorld requested and will decrease and expire over the next four years—will not have much of an impact on the market. While we can lament a hit to our renewable energy market should it happen, we should not direct our frustration at Trump. This constructed partisan battle distracts us from the deeper issue. Our energy could be more fruitfully spent towards reevaluating U.S. trade legislation; rather than join in more meaningless banter about Trump, we should engage in a more valuable discourse about how our trade and economic interests should be managed.