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Higher US Tariffs to Confine Chinese Solar Products

Posted on May 21, 2019 by Team iSolarWorld

Once again, the conflict between two of the major solar- producing countries has followed up in the news. Earlier this month, US president Trump vocalized his upcoming intentions of imposing an increased tariff on all Chinese solar ship-ins. This initiative by Trump through twitter can mutilate generating revenues of some of the big names in this industry (in China). Owing to this unforeseen circumstance, sundry of companies have already started playing it safe by moving operations to other countries with low labor costs, such as Malaysia, Philippines, Vietnam, and Mexico; or cease their production extramurally.  Correlating to the incident of anti-dumping tariffs on China's solar exports in 2012.

The irony is the occurrence of an uprise of the solar industry in the stock market 2019! In fact, this year is likely to be proved as “the touch of Midas” for all the solar – industry investors/ shareholders.

INFLUENCE OF TRUMP’S TARIFFS ON THE SOLAR MARKET

President Trump cannot do much on this regard, as his trade war with China might not have much impact on the industry. By increasing tariffs from 10 percent to 25 percent on worth 200 million dollars goods, wherein, the additional goods sent in by China remain untaxed, the effect over US solar market stands to be finite in many terms. Though it will affect a county of inverter-makers, their impacts will be specific to the U.S. module. Larger inverter makers that have been subjected to these tariffs before as well, like – ‘Enphase’, ‘Sungrow’ frittered for months now to shift into diversified manufacturing.

As a matter of fact, the aluminum frames, back sheets, and junction boxes are all entailed in the list of products paying that 25 percent tariff. This will increase the cost of U.S. solar module production, which the Trump administration reported supporting all these while through slashing tariffs on imported modules at the full length of the Section 201 regimen.

Trump’s deliberate attempts to discourage the Chinese solar market have seen no bar yet! His tweets also suggest that there will be tariffs on another worth 325 million dollars of Chinese products. The inclusion of lithium-ion batteries could be a huge blow to the energy storage market as well. Marketers have got a lot to lose if higher U.S. tariffs make their products less competitive here.

Interestingly, the share price of First Solar and SunPower, the largest solar manufacturers in the U.S, did not undertake any stress after Trump’s declaration. Because the act of discrepancy in previous tariffs has enabled certain companies to import panels absolutely tariff-free. Both First Solar and SunPower fall under this umbrella only. Which means, they can also import solar panels tariff-free. If this is not enough, U.S. production is reducing domestic demand for foreign solar panels overall.

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