America’s second-largest solar panel maker, Suniva Inc., is knocking on President Trump’s door to seek relief from the pain that foreign imports — especially from China — are causing its business. The Wall Street Journal reports that the company has filed a petition with U.S. International Trade Commission (ITC) asking for a 40 cents a watt tariff for four years on non-U.S. manufactured solar cells.
“President Trump has talked for a year about the importance of U.S. manufacturing,” Suniva’s Executive Vice President of Commercial Operations Matt Card told the Wall Street Journal. “Here’s a chance to make a meaningful difference in the manufacturing outlook in one of the fastest-growing technology segments in the U.S. market today.”
The company, which filed for bankruptcy last week, blames its woes on a glut of cheaper solar product imports. However, it is worth noting that Suniva itself is not wholly U.S. owned: Hong Kong-based Shunfeng International Clean Energy holds a 63 percent stake in the company.
US Solar Imports Surge
Government data shows that last year, the U.S. imported nearly $8.1 billion worth of solar cell panels or modules, up nearly 38 percent from the year before. Also, more than 86 percent of those imports last year, worth more than $7 billion came from Asia. Mexico and Canada are also prominent players in this market sending solar panels across the border. America’s trade with the two neighbors is governed under NAFTA, and as President Trump doubles down on renegotiating the terms, Suniva is seeking tariffs on solar panels imported. (See also: Trump Tells Canada, Mexico, He Won't Terminate NAFTA Treaty Yet - White House)
There are precedents for the U.S. taking trade measures against Chinese solar imports based on a complaint by a U.S. company. In 2012, the Obama administration took action after SolarWorld Inc registered a grievance. The government closed a loophole that allowed Chinese companies to avoid tariffs by using solar cells manufactured in Taiwan, according to The New York Times.
In addition to that, the government also imposed anti-dumping duties in the range of 26.71 to 78.42 percent and anti-subsidy duties between 27.64 and 49.79 percent on most Chinese solar panel imports. Needless to say, this hurt Chinese imports for the year, benefiting Malaysia to a degree, but China gathered steam again after the duties were withdrawn.
In 2015, Bloomberg reported that after a review, the U.S. Department of Commerce revised those existing duties dramatically. The anti-dumping duty varied across companies, being set between as low as 0.79 to 239 percent, while the anti-subsidy duty was kept at 20.94 percent from the earlier wider range.
The WSJ report suggests that Chinese solar panel manufacturers not only have the advantage of subsidies provided to them by their government but have also navigated around the tariffs by opening up factories in other countries like Thailand and Vietnam. It is interesting to note that U.S. imports from these two countries have seen an exponential growth over the past few years. During 2015-16, solar panel imports from Vietnam grew nearly 200 percent to $514 million, while those from Thailand grew 120 percent to $519 million. To put that in context, those numbers were just $914,000 for Vietnam and $7,435 for Thailand in 2012.