US may put emergency tariffs on solar imports
03:40 PM, May 30, 2017 / LAST MODIFIED: 03:47 PM, May 30, 2017

US may put emergency tariffs on solar imports

The United States has notified the other 163 members of the World Trade Organization that it is considering putting emergency "safeguard" tariffs on imported solar cells, according to a WTO filing published on Monday.

The move raises the stakes in a global battle to dominate the solar power industry, which has grown explosively in the past five years. As production has increased, prices have tumbled, favoring producers who can take advantage of economies of scale.

The United States, China and India are vying to be the market leader, and are looking out for any perceived breach of the international trade rules by their rivals.

Last September, the WTO ruled that India was illegally discriminating against US solar exports, while India launched its own WTO complaint about solar subsidies in eight US states.

The United States' ability to attract renewable energy investment has been tarnished by the shift in energy policy under US President Donald Trump, putting China and India on top, a report by British accountancy firm Ernst & Young said earlier this month.

The US decision to consider safeguard tariffs follows a petition to the US International Trade Commission (ITC) by Suniva, Inc, the filing said.

Under WTO rules, such temporary tariffs may be used to shield an industry from a sudden, unforeseen and damaging surge in imports. They can be challenged by other WTO members.

The ITC will decide by Sept. 22 whether the US industry has suffered "serious injury", and if that is the case it will submit its report to Trump by Nov. 13, the filing said.

Suniva's petition said the volume of imports rose by 51.6 percent between 2012 and 2016, while the value of those imports grew by 62.8 percent from $5.1 billion to $8.3 billion.

"The petition alleges that increasing imports have taken market share from domestic producers and have led to bankruptcies, plant shutdowns, layoffs, and a severe deterioration of the financial performance of the domestic industry," the US filing said.

While imports have risen, US producers have seen business shrivel, with 1,200 manufacturing jobs lost and a 27 percent wage decline in the four years to 2016. US solar cell plants went from running at 81.7 percent of capacity in 2014 to 28.9 percent in 2016, the filing said.

"Data in the petition also indicates that (US producers')domestic market share fell from 21.0 percent in 2012 to 11.0 percent in 2016, despite a $4 billion growth of the US market over the same period."

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