On Jan. 22, President Trump approved a major import tariff of 30 percent on solar cells and modules. The tariff will be in place for several years, during which time it will reduce incrementally.
The tariff was imposed after International Trade Commission (ITC) review based on formal requests from U.S. manufacturers. For both products, the saga goes back several years.
These manufacturers first requested relief in 2011. The Obama administration responded with tariffs on imports from specific countries where the products were manufactured. When the parent companies moved their operations to other countries, the Obama administration issued new tariffs on those countries, too.
With the tariff approved on Monday, the Trump administration is trying to eliminate this cat-and-mouse drama by casting a much wider net that manufacturers can’t evade.
Whether the tariff will work is yet to be seen. Trump’s mantra has always been “America first,” and Monday’s decision was packaged in that theme. In announcing the decision, U.S. Trade Representative Robert E. Lighthizer described the tariff as a strong reminder that “the Trump administration will always defend American workers, farmers, ranchers and businesses.”
While U.S. manufacturers, whose complaints led to the action, applauded the administration’s intervention, solar industry proponents responded with dire predictions for their industry and accused the Trump administration of intending to bolster the U.S. coal industry over a solar industry that is booming.
Solar is one of the fastest growing industries in the country. Aided by rapidly falling costs, the industry employs nearly 400,000 people and was on pace for more rapid expansion over the next 10 years, according to the Bureau of Labor Statistics. It is unclear how these tariffs will affect solar industry growth.
While the new tariff could provide immediate relief to U.S. manufacturers, it remains unclear whether these companies can fill the space currently dominated by foreign competition, and as the costs of the tariff are passed along to consumers, solar industry proponents have expressed concern that growth may be stifled and jobs may be lost.