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The United States imposed an additional 25% tariff on imported Chinese solar cells and modules last week in America's steadily escalating trade war with one of the world's most dominant economies and international powers. 

Clean Power

US Continues Trade War Against China With New 25% Solar Tariff

The United States imposed an additional 25% tariff on imported Chinese solar cells and modules last week in America’s steadily escalating trade war with one of the world’s most dominant economies and international powers. 

The United States imposed an additional 25% tariff on imported Chinese solar cells and modules last week in America’s steadily escalating trade war with one of the world’s most dominant economies and international powers.

US President Donald Trump and his Administration have been waging an escalating trade war against China over the past few months, but it was only last week that the trade war expanded to threaten the US solar industry, when US Trade Representative Robert E. Lighthizer increased the number of product lines subject to a 25% tariff on imported Chinese products. The newly-imposed tariffs will impact $50 billion worth of Chinese products, including solar cells and modules.

This 25% tariff is in addition to the 30% tariff that Donald Trump imposed on all imported solar cells and modules in January of this year.

The list of products subject to the new 25% import tariff is extensive (PDF) and, unsurprisingly, China is not responding well. China’s Ministry of Commerce quickly retaliated, announcing it would impose its own trade barriers of the “same scale and strength” — in a move likely to target agricultural goods, cars, and energy.

There are obviously huge implications behind the move, one that extends well beyond each country’s respective clean technology industries. That being said, it is unclear just now exactly how this new move will impact the US solar industry, considering that, according to the Energy Trade Action Coalition in January, China only made up 11% of solar cells and modules imported into the United States. Rather, it was Malaysia with 31% that ate up the lion’s share, followed by Kore with 21% and Vietnam with 14%.

As such, this new tariff will likely be much less impactful than the 30% tariff the US imposed on all imported solar cells and modules — a move which has already cost the industry $2.5 billion in cancelled projects and the likely loss of thousands of jobs across the country.

Another thing to take into account is one of the immediate impacts the 30% import tariff has had on the solar industry, with several big-name solar manufacturers announcing new factories based in the United States — representing either necessary and opportunistic expansions, or overseas-based companies attempting to circumvent the import tariff by creating local manufacturing facilities. Specifically, and in short order, China’s JinkoSolar announced in early April that it would open a US manufacturing facility in Jacksonville, Florida; US-based First Solar announced it would open a new solar manufacturing plant in Perrysburg, Ohio; and Korean solar PV manufacturer Hanwha Q CELLS announced it was building a PV module manufacturing plant in Georgia.

First Solar declined to comment on whether the move will have an impact on its business, but Hanwha Q CELLS explained it will barely be affected, considering that its fully assembled modules imported into the US come from Malaysia or South Korea, and thus are only affected by the Section 201 trade barriers. Hanwha Q CELLS Chinese factory does not serve the US market, and solar cells for the company’s Georgia facility will similarly come from its South Korea or Malaysia factories. JinkoSolar did not reply for comment.

The situation as it applies to Hanwha Q CELLS is relatively applicable across the board, however, according to Xiaoting Wang, solar analyst for Bloomberg New Energy Finance (BNEF):

“Currently, PV cells and modules originating in China are subject to two sets of tariffs: antidumping and countervailing duties that originally started in 2012 and experienced some amendments since then, and 30% tariffs under Section 201 commencing in February 2018.

“The total value of the two sets of tariffs is greater than 50% even for individual manufactures with the lightest penalty. Therefore, Chinese module firms are shipping products to the U.S. from their factories in Southeast Asia, which are still subject to the Section 201 tariffs but exempt from the duties on products made in China. The potential additive tariffs proposed in Section 301 would make the already abandoned sourcing channel even less feasible, but not affect the existing shipment process.”

There is also the possibility that the filing includes an exception for solar PV cells and modules from this particular trade barrier, given the somewhat ambiguous nature of the filing.


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