In the latest round of fisticuffs between US and Chinese solar firms, the Coalition for Affordable Solar Energy (CASE) and consultancy The Brattle Group claim that any US-levied tariffs on imported Chinese solar products would cost tens of thousands of jobs and dent US solar demand.
January 30, 2012 – In the latest round of fisticuffs between US and Chinese solar firms, the Coalition for Affordable Solar Energy (CASE) and consultancy The Brattle Group claim that any US-levied tariffs on imported Chinese solar products would cost tens of thousands of jobs and dent US solar demand. (In a related story — do they get together and time these things? — the Coalition for American Solar Manufacturing seemingly has the US Department of Commerce in its corner.)
According to the study commissioned by CASE [PDF provided here], imposing a 50% tariff would result in anywhere from $621M to $2.3B in “net consumer losses” and around 15,000 to 43,000 jobs lost over the following three years. For a 100% tariff, those numbers jump to $698M and $2.6B and ~17,000-50,000 jobs. On top of that, CASE and Brattle Group add likely retaliation by China to slap a tariff on US polysilicon exports, which they say would claim nearly 11,000 jobs within a year. “Even under the most conservative assumptions, we did not find a scenario where imposing a tariff would create more jobs than it eliminates,” says report author Mark Berkman.
Imposing tariffs of either level would hike module prices by 25%-30%, which might help domestic producers but ultimately will get passed on to consumers. And these calculations assume that PV costs will keep falling, technologies will keep improving, and incentives will stay on the books, without which “the negative impacts of the tariff on employment would be significantly greater.”
The report also looks at the potential end-demand impacts of any tariff on Chinese solar imports. If no tariff is imposed, aggregate demand for PV systems would nearly triple to 4.9GW by 2014; a 50% tariff, CASE and Brattle Group say, would raise prices and delay growth, possibly denting end demand to 3.35GW in 2014; a 100% tariff would stunt growth to 3.16GW.
Tariffs slow US PV demand growth. (Source: The Brattle Group, CASE)
Not surprisingly, CASM quickly came up with a list of rebuttals to the CASE study. In a statement, SolarWorld CEO Gordon Brinser calls the study “highly speculative” and devoid of any connection to trade laws, which are the crux of CASM’s case. Chinese importers, not American consumers, will reap any benefits of lower costs, CASM and SolarWorld claim: “US consumers will sustain the brunt of economic harm if China cinches a monopoly over world production, destroying the US domestic manufacturing industry along the way.” The study also doesn’t emphasize (as they claim it should) the importance of losing high-tech and manufacturing jobs which are seen as key to underpinning the US economy. And solar manufacturing in particular leads to energy independence: “Why should we want to rely on illegal imports from China for our supply of solar energy?”
Brinser and CASM also take issue with CASE president Jigar Shah’s reference to a Wall Street Journal article which suggests that US firms haven’t benefitted as hoped from duties on imports of Chinese tires. “Two years ago, the resellers of Chinese tires put out a very similar study, claiming that for every US manufacturing job saved by the Section 421 trade action then being investigated, anywhere between 12 and 25 jobs at tire retailers would be lost,” they say. “This never happened. There is no reason to believe that CASE’s study on behalf of dumped subsidized Chinese imports will prove to be any more accurate.”
“Solar manufacturers of the West didn’t start a trade war; in fact, we’re attempting to stop it,” CASM says.