Respite for South East Asia Manufacturers, As US Delays Decision on Solar Tariffs

Highlights :

  • Vietnam, Thailand and Malaysia have been in the cross hairs of the latest move, which has been delayed for now.
  • Tariffs on solar imports is a prickly topic, owing to the large number of projects that are already under implementation  on the assumption of existing rates.
Respite for South East Asia Manufacturers, As US Delays Decision on Solar Tariffs

The complaint by a group of manufacturers calling themselves the American Solar Manufacturers Against Chinese Circumvention, or A-SMACC that sought higher tariffs on Southeast Asian solar-power imports has led to an interesting situation with the US department of commerce asking the firms to identify themselves first. The issue had been raised by the largest body of developers too, the Solar Energy Industries Association (SEIA), which had warned of a serious impact on US solar sector if fresh tariffs were to be imposed on imports. The commerce department move was predictable, considering the rarity of action being taken on anonymous complaints, especially on an issue as broad ranging as tariffs on imports. A-SMACC is allegedly a group of 18 US manufacturers. Among their allegations is that continued Chinese centric imports into the US, routed through South East Asia especially Vietnam, Malaysia and Thailand, have done immense damage to the US solar manufacturing sector.

That a group of US senators have also written to the Department of Commerce asking it to take a more ‘considered’ approach before any punitive action will obviously have played a role too.

The SEIA, arguing against any proposed tariffs has claimed that these would be devastating to the domestic solar industry, potentially disrupting 18 gigawatts of deployment through 2023, which would account for more than all U.S. solar capacity before 2015 and is nearly a quarter of the 63 gigawatts of solar panel installments forecasted through 2023.

The US solar sector, much like India, is unable to service domestic demand, something that is becoming a sore point for politicians as Chinese imports make up the massive gap, further widening the massive trade deficit between the two countries.

The last lot of tariffs implemented by the Trump administration saw a drop, but only for a few months, before imports roared back, though they have not returned to peak levels.

Even at that time, the SEIA had claimed that tariffs would lead to $19 billion in lost new private sector investment, equaling a potential 62,000 new U.S. jobs. That actually does not seem to have happened, by all accounts since then.

What is certain however is that tariffs on top of the high disruptions already impacting solar costs in China this year which has led to overall module prices climbing 15% so far, will lead to a major problem for projects about to place orders, as in India.

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Prasanna Singh

Prasanna has been a media professional for over 20 years. He is the Group Editor of Saur Energy International