Trump's Tax on Solar Power: Here's What You Need to Know
Donald Trump has imposed a 30 percent tax on imported solar panels, a move that's expected to pull the plug on tens of thousands of American jobs, while slowing the rush to renewable energy and rewarding fossil-fuel producers. Here's what you need to know:
America First?
The solar tax announcement came down Monday from the Office of the U.S. Trade Representative – during the government shutdown – followed by a quiet White House signing ceremony Tuesday. Solar manufacturers in the U.S. had been "decimated" by unfair trade, Trump said, arguing the new tax means "those companies will be coming back strong."
The lack of fanfare was from the White House was curious. Taxing solar imports is one of the first concrete implementations of Trump's "America First" trade agenda. And Trump himself had been badgering senior staff to, "Bring me some tariffs!"
But taxing solar panel imports is not a clear political victory for the president – underscoring the reality that U.S. trade policy is far more complex than Trump's bumper-sticker sloganeering. "It boggles my mind that this president – any president, really – would voluntarily choose to damage one of the fastest-growing segments of our economy," Tony Clifford, chief development officer of Standard Solar, a leading installer, told reporters. "This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries."
American Plants, Foreign Owners
The solar trade dispute came to a head last year, when two distressed companies that manufacture solar panels in the United States filed a trade complaint to the U.S. International Trade Commission (ITC), an independent federal agency. The flood of cheap solar panels produced by Chinese-owned solar firms across Asia, the companies argued, had unfairly undercut their businesses.
Suniva and Solar World were not wrong about solar panel dumping: The ITC ruled, unanimously, that the companies had been harmed by low-cost imports, and recommended in October that tariffs be imposed. Under U.S. trade law, the ITC's recommendation is non-binding. The final decision to impose an import tax fell to the president himself – leading to Monday's decision.
At first glance, Trump appeared to have been given a golden political opportunity to protect American manufacturers and U.S. jobs. But the big picture is far muddier: Despite manufacturing in the United States, the two companies at the heart of the trade dispute are not American. Suniva, which operates in Georgia, is Chinese owned. Solar World, producing in Oregon, is a German concern. Both operations are highly automated – employing only hundreds of Americans. And both have been kept afloat by large taxpayer subsidies – about which Republicans have long cried foul.
The Solar Boom
If the flood of cheap imported panels harmed a few domestic manufacturers, the same imports created a much greater solar boom in America. Solar energy has become cost-competitive with coal. It is now being adopted even in red states that lack renewable energy mandates – purely on the economics. Florida Power & Light, for example, recently announced it has shuttered an aging coal plant in favor of four new solar farms, featuring more than 1 million panels combined.
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