Wrapup 2: Job creator, or job killer? Trump angers solar installers with panel tariff

Solarworld AG

23/01/2018 22:29

(Adds details, background, updates stock moves) 
    By Ayesha Rascoe and Nichola Groom 
    WASHINGTON/LOS ANGELES Jan 23 (Reuters) - U.S. President 
Donald Trump signed into law a steep tariff on imported solar 
panels on Tuesday, a move billed as a way to protect American 
jobs but which the solar industry said would lead to thousands 
of layoffs and raise consumer prices. 
    The 30 percent tariff on solar panels is among the first 
unilateral trade restrictions imposed by the administration as 
part of a broader protectionist agenda to help U.S. 
manufacturers, but which has alarmed Asian trading partners that 
produce lower cost goods. The administration also introduced a 
tariff on imported washing machines.  urn:newsml:reuters.com:*:nL2N1PH1WV 
    "You're going to have people getting jobs again and we're 
going to make our own product again. It's been a long time," 
Trump said as he signed the order.  
    But the solar industry countered that the move will raise 
the cost of installing panels, quash billions of dollars of 
investment, and kill tens of thousands of jobs, raising 
questions about whether Trump's move will backfire by triggering 
mass layoffs.  urn:newsml:reuters.com:*:nL2N1PI1BQ 
    "We are not happy with this decision," said Abigail Ross 
Hopper, president of the U.S. Solar Energy Industries 
Association, on a conference call with reporters on Tuesday. 
"It's just basic economics - if you raise the price of a product 
it's going to decrease demand for that product." 
    The leading solar trade group predicted that the tariffs 
could cut forecasted solar installations this year by nearly 20 
percent, to 9 gigawatts from 11 gigawatts, and lead to the loss 
of 23,000 jobs in the United States, the world's fourth-largest 
solar market after China, Japan and Germany.   
    Research firm Wood Mackenzie estimated that over the next 
five years the tariffs would reduce U.S. solar installation 
growth by 10 to 15 percent. 
    The U.S. solar industry employs more than 260,000 workers - 
about five times more than the coal industry - with the vast 
majority involved in installation rather than panel 
manufacturing. 
    U.S. Republican Senator John McCain of Arizona, a big solar 
power producing state, said in a Twitter post that the tariffs 
amount to "nothing more than a tax on consumers." 
    The main beneficiaries include U.S.-based solar 
manufacturers Suniva and SolarWorld - both controlled by foreign 
parent companies. They petitioned for the trade relief arguing 
they could not compete with the cheap imports that have caused 
panel prices to fall more than 30 percent since 2016 and asked 
for the equivalent of a 50 percent tariff. 
    Suniva on Monday said the tariffs were "necessary," while 
SolarWorld said it was "hopeful they will be enough."  
    Bankrupt Suniva is majority-owned by Hong Kong-based 
Shunfeng International Clean Energy  1165.HK , and SolarWorld is 
the U.S. arm of Germany's SolarWorld AG  SWVKk.F .  
    Shunfeng rose 2.6 percent after the announcement and 
SolarWorld was up 22 percent. 
    Other U.S. solar stocks were mixed. SunPower Corp  SPWR.O , 
which manufactures panels in Asia, was down more than 6 percent 
and residential installer SunRun Inc.  RUN.O  was up about 6 
percent. The tariffs were broadly in line with investor 
expectations, creating some relief in the market, analysts said. 
    Both SunPower and Sunrun said they disagreed with the 
decision to impose tariffs. 
     
    WINNERS AND LOSERS 
    Research firm CFRA said it expects the tariffs to increase 
solar system prices by about $0.10 per watt. It reckons First 
Solar  FSLR.O , a U.S. company with offshore panel manufacturing 
whose technology is not included in the tariff, would be the 
biggest beneficiary, while China manufacturers such as 
JinkoSolar  JKS.N  would be the biggest losers.  
    Globally, solar capacity soared to almost 400 GW last year 
from under 10 GW in 2007, according to the International 
Renewable Energy Administration.  urn:newsml:reuters.com:*:nL8N1PI08F 
    China, the world's biggest solar panel producer, branded the 
move an "overreaction" that would harm the global trade 
environment for affected products. 
    "The U.S.'s decision ... is an abuse of trade remedy 
measures, and China expresses strong dissatisfaction regarding 
this," Wang Hejun, the head of the commerce ministry's Trade 
Remedy and Investigation Bureau, said in a statement on its 
microblog. 
    "China will work with other WTO members to resolutely defend 
its legitimate interests in response to the erroneous U.S. 
decision." 
    South Korea's trade minister Kim Hyun-chong said the new 
U.S. tariffs violated World Trade Organization (WTO) rules. 
    "The United States has opted for measures that put political 
considerations ahead of international standards," Kim told a 
meeting of industry officials. "The government will actively 
respond to the spread of protectionist measures to defend 
national interests." 
    Trump dismissed the prospect of a trade war and said during 
the signing that "a lot of manufacturers" will come to the 
United States to build solar plants. 
    CFRA analyst Angelo Zino said he expected any added 
manufacturing jobs would be "minimal" given the 18 months to two 
years it takes to build and ramp up a new production facility 
and the industry's shift toward automation. 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Trump slaps steep U.S. tariffs on imported washers, solar panels 
    urn:newsml:reuters.com:*:nL2N1PH1WV 
U.S. solar sector says Trump tariffs will kill American jobs    
 urn:newsml:reuters.com:*:nL2N1PI1BQ 
Asia fears U.S. tariffs on washing machines, solar panels just 
the start     urn:newsml:reuters.com:*:nL4N1PI1AV 
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 (Reporting by Nichola Groom; Editing by Susan Thomas) 
 ((nichola.groom@thomsonreuters.com;)) 
 
Keywords: USA TRADE/TARIFFS