Trump slaps steep U.S. tariffs on imported washers, solar panels (updated)

Solarworld AG

23/01/2018 01:21

(Adds LG, Samsung share prices, details on solar energy impact) 
    By David Lawder and Nichola Groom 
    WASHINGTON/LOS ANGELES, Jan 22 (Reuters) - U.S. President 
Donald Trump slapped steep tariffs on imported washing machines 
and solar panels on Monday, giving a boost to Whirlpool Corp and 
dealing a setback to the renewable energy industry in the first 
of several potential trade restrictions. 
    The decisions in the two "Section 201" safeguard cases 
followed findings by the U.S. International Trade Commission 
that both imported products "are a substantial cause of serious 
injury to domestic manufacturers," U.S. Trade Representative 
Robert Lighthizer said in a statement. 
    The washer tariffs exceeded the harshest recommendations 
from ITC members, while the solar tariffs were lower than 
domestic producers had hoped for. The restrictions aim to help 
domestic manufacturers but drew complaints that consumer costs 
for new washers and solar installations will rise.   
    Trump will impose a 20 percent tariff on the first 1.2 
million imported large residential washers in the first year, 
and a 50 percent tariff on machines above that number. The 
tariffs decline to 16 percent and 40 percent respectively in the 
third year. 
    A 30 percent tariff will be imposed on imported solar cells 
and modules in the first year, with the tariffs declining to 15 
percent by the fourth year. The tariff allows 2.5 gigawatts of 
unassembled solar cells to be imported tariff-free in each year. 
    Whirlpool  WHR.N , which sought the washers "safeguard" 
action against rivals Samsung Electronics  005930.KS  and LG 
Electronics  066570.KS  after years of anti-dumping cases, saw 
its shares rise 1.8 percent in after-hours trade. 
    "By enforcing our existing trade laws, President Trump has 
ensured American workers will compete on a level playing field 
with their foreign counterparts," Whirlpool Chairman Jeff Fettig 
said in a statement. 
    The move punishes Samsung, which recently began washer 
production in South Carolina, and LG, which is building a washer 
factory in Tennessee.  
    "This tariff is a tax on every consumer who wants to buy a 
washing machine. Everyone will pay more, with fewer choices," 
Samsung said in a statement. 
    LG Electronics said that the decision will hinder the 
ramp-up and employment prospects of its new plant, which will 
not begin production until late 2018 or early 2019. 
    Trump ignored a recommendation from the ITC to exclude South 
Korean-produced washers from LG from the tariffs, as prior 
anti-dumping duties on these machines have been dropped. The 
decision could also hurt retailer Sears Holdings  SHLD.O , whose 
Kenmore brand sources its larger washers from LG's overseas 
factories. 
    LG shares fell as much as 5 percent in Seoul trading against 
the wider market's  .KS11  0.4 percent gain. Shares in Samsung 
Elec were up 0.83 percent. 
    BLOW TO RENEWABLE ENERGY  
    The tariffs are expected to slow a shift to renewable energy 
in the United States, just as solar was becoming cost 
competitive with electricity generated from fossil fuels like 
coal, an industry that Trump has pledged to protect. 
    MJ Shiao, head of renewable energy research for Wood 
Mackenzie, said the tariffs would likely reduce projected U.S. 
solar installations by 10 to 15 percent over the next five 
years. 
    "It is a significant impact, but certainly not destructive 
to the end market," Shiao told Reuters. 
    The domestic solar panel producers who sought the trade 
remedies wanted tariffs of 50 percent - the highest allowed 
under law. Petitioners Suniva and SolarWorld  SWVKk.F  have said 
they cannot compete with the influx of cheap imports, mostly 
from Chinese producers, which has caused solar panel prices to 
drop more than 30 percent since early 2016. 
    The U.S. solar trade group, the Solar Energy Industries 
Association, campaigned against the tariffs and estimated the 
decision would create a "crisis" for the burgeoning industry and 
result in the loss of 23,000 U.S. jobs this year as billions of 
dollars in solar investments are canceled. 
    Suniva, majority-owned by Hong Kong-listed Shunfeng 
International Clean Energy Ltd  1169.HK , applauded the 
decision, saying that Trump "is sending a message that American 
innovation and manufacturing will not be bullied out of 
existence without a fight." 
       
    FIRST OF SEVERAL POTENTIAL ACTIONS 
    The decisions were the first of several potential tariff 
actions that Trump may take in the coming weeks and months. He 
is considering recommendations on import restrictions for steel 
and aluminum on national security grounds under a 1962 trade law 
and tariffs or other trade sanctions against China over its 
intellectual property practices. 
    The intellectual property, washer and solar panel probes 
were done under a 1974 trade law that has been seldom invoked 
since the World Trade Organization was launched in 1995. 
 
 (Additional reporting by Eric Walsh in Washington; Writing by 
David Lawder; Editing by Peter Cooney and Cynthia Osterman) 
 ((eric.walsh@thomsonreuters.com; 1-202-898-8457; Reuters 
Messaging: eric.walsh.thomsonreuters.com@reuters.net)) 
 
Keywords: USA TRADE/TARIFFS