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

Solarworld AG

22/01/2018 23:39

(Adds details on tariffs, reaction from companies affected) 
    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, marking his first moves to erect 
trade restrictions under seldom-used trade laws that allow 
unilateral actions. 
    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. 
    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 Corp  WHR.N , which brought the washers 
"safeguard" case against rivals Samsung Electronics  005930.KS  
and LG Electronics  066570.KS  after years of anti-dumping 
cases, stands to benefit from the decision. 
    "This announcement caps nearly a decade of litigation and 
will result in new manufacturing jobs in Ohio, Kentucky, South 
Carolina and Tennessee," Whirlpool Chairman Jeff Fettig said in 
a statement. "By enforcing our existing trade laws, President 
Trump has ensured American workers will compete on a level 
playing field with their foreign counterparts." 
    The move punishes Samsung, which recently began washer 
production in South Carolina, and LG, which is building a washer 
factory in Tennessee. 
    LG said in a statement that the decision hindered the 
ramp-up and employment prospects of its new plant, which will 
not begin production until later 2018 or early 2019. Sears 
Holdings'  SHLD.O  Kenmore brand sources its washers from LG 
factories in South Korea. 
    "We are very disappointed in this misguided decision, which 
far exceeds what the (ITC) recommended," LG said. "This is a 
textbook case about how certain companies can game the process 
to use trade laws to try to accomplish what they can't 
accomplish in the marketplace." 
     
    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. 
    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 China. 
    Solar panel prices have dropped more than 30 percent since 
early 2016, benefiting buyers but harming producers across the 
globe. 
    The U.S. solar trade group, the Solar Energy Industries 
Association, campaigned against the tariffs and estimated the 
decision would effectively cause the loss of 23,000 U.S. jobs 
this year and result in the delay or cancellation of billions of 
dollars in solar investments. 
    "While tariffs in this case will not create adequate cell or 
module manufacturing to meet U.S. demand, or keep foreign-owned 
Suniva and SolarWorld afloat, they will create a crisis in a 
part of our economy that has been thriving, which will 
ultimately cost tens of thousands of hard-working, blue-collar 
Americans their jobs," said SEIA President Abigail Ross Hopper. 
    Suniva, majority-owned by Hong Kong-listed Shunfeng 
International Clean Energy Ltd  1169.HK , applauded the 
decision, saying: "Over the last 5 years, nearly 30 American 
solar manufacturers collapsed. Today the President is sending a 
message that American innovation and manufacturing will not be 
bullied out of existence without a fight." 
 
 (Additional reporting by Eric Walsh in Washington; Writing by 
David Lawder; Editing by Mohammad Zargham and Peter Cooney) 
 ((eric.walsh@thomsonreuters.com; 1-202-898-8457; Reuters 
Messaging: eric.walsh.thomsonreuters.com@reuters.net)) 
 
Keywords: USA TRADE/TARIFFS