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Solar Panel Tariffs – No Benefit, Only Problems

Testimony at the October 3 hearing before the U.S. International Trade Commission (ITC) confirmed the misguided nature of government-imposed solar panel "dumping" tariffs and highlighted the dangers of antagonizing one of our strategic trade partners. With mere days to go before ITC's final determination on the contentious tariffs issue, key members of the U.S. solar industry used the hearing to voice serious concern about the policy's effects.

Since the time German-owned SolarWorld first petitioned the ITC for an investigation into China’s trade practices in this space, a range of U.S. solar companies have warned against imposing tariffs. Nonetheless, the ITC earlier this year imposed tariffs on solar panel imports from China on a preliminary basis, and now SolarWorld is using the same playbook before the European Union.

The effect on reducing imported Chinese solar panels into the U.S. market has, at most, been minimal. Indeed, most Chinese-made solar panels that enter the U.S. market come from very large, “Tier 1,” manufacturers that have vast cross-border capabilities. These Chinese companies quickly applied a “tolling” strategy whereby their solar panels have final components installed in Taiwan or some other country and then get imported to the U.S. Thus the “new normal”: we’re still buying Chinese products – they’re just “tolled” through Taiwan. To critics, this is technical sleight of hand; to the global market, it’s survival.

The reality remains that U.S.-imposed tariffs have done little to protect SolarWorld and other companies that fundamentally can’t compete on their own. Instead it has antagonized a strategic trade partner who is now threatening to impose their own tariffs on imported polysilicon material, which would hurt U.S. producers. And, it has introduced additional cost into the equation for solar power which is counterproductive to the continued growth and stability of an industry, which is creating jobs for workers in the U.S. and around the world.

As a supplier to the global solar market, we at GT Advanced Technologies have shared our opinion with the ITC. The U.S. government’s final determination on October 9 could reduce the tariffs somewhat from the preliminary levels and we expect a possible overturn of the “critical circumstances” provision that allows for retroactive imposition of duties. But the tariffs will likely remain.

We hope ITC officials are willing to analyze the real impacts of these troubling tariffs, and elect instead to let companies compete in the global marketplace as they should: on their own two feet.

Tom Gutierrez is CEO of GT Advanced Technologies, a leading global provider of advanced production equipment and technology in the solar and LED industries, headquartered in Nashua, N.H.

Lead image: Solar Panel via Shutterstock.

 

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