The hottest tariff endangers the position of the U

2022-09-22
  • Detail

Tariffs endanger the position of the United States in the global solar market

the U.S. solar industry is anxiously waiting for the trump government to decide whether to impose a large amount of tariffs on solar energy imports, which may reduce the installed scale of domestic solar energy and may damage the position of the United States in the rapidly growing international market

last month, the International Trade Commission (ITC), the federal agency responsible for investigating and offsetting unfair trade practices, recommended that the White House impose tariffs on imported solar panels, triggering a 60 day deadline for president trump to decide whether to implement trade relief. Trump's protectionist remarks have become a decisive feature of his presidency, and some form of tariff is expected

tariffs pose a major risk in the United States, and it is a short-term risk to invest in lithium batteries in many foreign listed companies, such as BYD, Shanshan, dadongnan, camel, etc.

tariffs pose a clear direct threat to the U.S. solar industry. Although the import of cheap solar cells and solar panels has made many American solar manufacturers lose business, they have become the gospel of solar installers and promoted the rapid growth of residential and utility photovoltaic installations. Tariffs may increase the cost of solar projects, reduce the National PV installation rate, and expose installers to risks. In the face of severe uncertainty, U.S. solar installers have stockpiled solar panels before the expected tariffs, leading to soaring prices

the United States' response to the tariff threat has created a chain effect around the world. India's emerging but fast-growing solar industry is declining as the price of solar panels stockpiled in the United States rises. India's solar energy projects rely heavily on cheap imports of Chinese components, and the decline in costs has led to the rapid decline of project costs to the lowest level in the world in the past few years. The short-term surge in U.S. demand has raised the prices of batteries and modules in China, and the deployment of many companies has also been affected, because their low project quotations are based on the assumption that prices continue to fall. Now this trend has been reversed, the completion of the project may stagnate, and some companies may be forced to abandon the guaranteed project, or start construction, or face bankruptcy

in addition to slowing down the solar power generation in India, the tariffs of the United States also pose a temporary threat to the solar energy manufacturing industry in Southeast Asian countries, especially Malaysia, Vietnam and Thailand, which have become major exporters of low-cost panels from the United States. The solar energy industry in these countries is booming, and Chinese enterprises change production in order to avoid the tariffs of the United States on components produced in Chinese Mainland and Taiwan. Since the United States now imports most of the panels from Southeast Asia, severe tariffs will damage companies in these countries that rely on U.S. demand

the tariffs of the United States will greatly benefit the long-term development of photovoltaic markets in other countries

however, these negative international impacts will be temporary, and the tariffs of the United States will bring net benefits to other countries

the price rise squeezing Indian installers is temporary. Once the tariff is implemented, American demand will fall, component prices will fall, and India will become a more important market for Chinese manufacturers. In the long run, the U.S. ruling can actually help India's solar industry by rebalancing the project market. The astonishing speed of the recent bidding of solar energy projects has raised concerns about the sustainability of these prices, and whether the low quality of photovoltaic power stations is caused by the lack of funds for the industrialization of achievements and the technological transformation of enterprises, which are eager to complete the projects with the cheapest components. By forcing a reassessment of the project price, the uncertainty surrounding the ITC ruling may help prevent competition. In addition, Prime Minister Narendra dot; Narendramodi has set ambitious goals for the deployment of solar energy. As part of the terms of the Paris Agreement, a strong government push will help expand the project in the long term

in other respects, tariffs will provide an opportunity for producers excluded from the ITC ruling (especially Singapore and Canada) to increase exports by increasing sales to the United States. Some solar modules have been exported to the United States and have the ability to increase slightly in the next year. Although the two countries are small in scale, they may directly enter the large market of the United States and increase production. The increase in production in Singapore and Canada cannot completely replace the supply from Southeast Asia to the United States, but these producers will be able to enter an exclusive market and charge higher prices to American installers of the same product. U.S. tariffs may ultimately be the gospel of manufacturing in both countries

on the other hand, China will easily cope with the reduction in U.S. demand, because in other places, especially developing countries, the demand for solar modules continues to grow. In the long run, the reduction in U.S. demand will only inhibit U.S. participation in the fast-growing market

people who support tariffs believe that by encouraging domestic solar groups and introducing procedures to process these values, they will improve the status of the United States in the world. This is unlikely to happen because the four-year tariff period is too short to encourage companies to open manufacturing plants in the United States. With such a brief protection window, manufacturers, including the two bankrupt companies that filed a lawsuit with ITC, will not be able to recover or meet the demand for solar panels in the United States. Tariffs will hurt U.S. installation companies and reduce U.S. solar power generation, while other countries are scrambling to use solar energy

solar energy is now the cheapest and fastest-growing energy on earth. If President trump imposes heavy taxes, it may damage the ability of the United States to obtain solar energy, but this will not damage the significant resistance to global solar energy deployment. The interests of the United States will not be affected by the imposition of trade protection, and the government should focus on other ways to encourage innovation and growth

Copyright © 2011 JIN SHI