Since the beginning of this year, two international powers-United States and China have locked their horns over the solar trade. Since January 2018, US President Donald Trump and his administration have been waging an escalating trade war against Xi Jinping’s China by imposing an additional 25% tariff on imported Chinese solar cells and modules.
This is an additional tariff imposed by the USA government as the country had already imposed tariffs on Chinese solar products since 2012, including 31% import tax. However, this was a specific response to Chinese export dumping and flooding the US market. These discounted Chinese goods pushed manufacturers from the domestic market to the margins. That same year Information Technology & Innovation Foundation (ITIF)also accused China along with some other countries of taking part in ‘green mercantilism’ that included export dumping, currency manipulation, intellectual property theft, and forced technology transfer.
While clearing their stand on the imposed tariff, the Trump administration has said that this step was necessary to protect countries intellectual property and also to help reduce the US trade deficit with China. However, unsurprisingly China has not taken this decision in a positive way and ruled out America’s claims by saying it ‘lacks substantive evidence’!
China exported $14 billion of solar equipment in 2016 and this was a 10% decline from 2015. However, Chinese investment in third-country exporters was a major factor in the decline. Following this situation, two solar manufacturing companies Suniva and SolarWorldsuggested a tariff should be levied against solar imports across the board. Other manufacturers, however, opposed the demand.
Industry experts see a rapid hike in the solar module prices in the US and they feared that this may push solar manufacturers to overcapacity, and therefore global module prices would likely follow downward. Shanghai-based Seeder Clean EnergyCEO, Alex Shoer believe that the tariff hike would ‘shrink’ the market in the USA. This is, of course, will not be a good sign.
As a result of this hike, many companies are now planning to build factories in the USA. China’s JinkoSolar in April 2018 had announced that it would open a US manufacturing facility in Jacksonville, Florida. Korean solar PV manufacturer Hanwha Q CELLS also announced a few months back that the company is also planning for a PV module manufacturing plant in Georgia town.
solar is an economic choice in almost any market in the world today, the only thing related to this rising industry is the financing mechanism. If any country fails to enforce the contract, it is difficult to finance solar development there. Amidst this situation when China has been pushed back, countries including Brazil, India, Kenya, and Australia have golden opportunity to seize the American solar market. This is a perfect time, for which these countries have been waiting for.
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