Why ITC Solar Trade Case Is Far From Over - by Tom Werner, President and CEO, SunPower

Let’s put it bluntly.  The International Trade Commission (ITC) made the wrong decision [Friday] in its finding of injury in the Section 201 solar trade case.:

The U.S. solar industry was roiled on Friday by a unanimous ruling in a much watched international trade case — one that some industry leaders fear could lead to steep new tariffs on imported crystalline silicon solar cells.

The bankrupt Georgia-based solar company Suniva joined forces with Oregon-based SolarWorld Americas to petition the U.S. International Trade Commission for relief earlier this year, saying that the U.S. solar industry “simply cannot survive” at a time when foreign imports of solar cells “have unexpectedly exploded and prices have collapsed.”

Solar World Americas is owned by a German firm and a majority of Suniva is owned by Shunfeng International Clean Energy, a Chinese company which has opposed the petition filed by Suniva’s restructuring officer.

The ITC, after considering the petition, ruled 4-0 Friday in favor of the two companies, finding that solar 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.”  The commission will now weigh what remedy to suggest.

Should the ITC move ahead with recommending import tariffs, quotas, or other global import restrictions, the result will be right out of an Economics 101 textbook.  Prices for American-manufactured solar equipment will rise, and a global marketplace will adjust to source from competitively-priced foreign sources.  That could undermine an American industry that has been experiencing exponential growth and creating jobs at an unprecedented rate.  And the potential knock-on effect on other industries we partner with – including steel, glass, and aluminum – is alarming.

If the intent of tariffs is to protect U.S. companies and employees, the practical effect would be just the opposite.  We need the Trump Administration to secure America’s position as an energy innovation leader, or a global competitor will undoubtedly seize the moment.
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The application of tariffs is not inevitable and is far from over.  The ITC will now hold a “remedy hearing” during which alternative recommendations will be put forward, followed by a formal ITC recommendation to President Trump, who will make a final decision by early January.
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Finally, history must be our guide.  In 2002 the U.S. government placed stiff tariffs on imported steel in an effort to protect the American steel industry.  Instead the action did major damage. It caused the loss of up to 200,000 domestic jobs and the loss of $4 billion in wages over a nine-month period.  Adding insult to injury, the tariffs were ultimately withdrawn after a negative hearing at the World Trade Organization.  The U.S. should not make the same terrible mistake in determining the near-term future of the solar industry.

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