Solar panel rates: a fight with China that Trump may want to avoid

  This solar farm floats on a flooded coal mine

President Trump has the opportunity to hurt China in trade this month, but it could also end up hurting jobs in the United States.

Trump must decide before the end of January, whether to impose penalties on tariffs on foreign imports of solar panels, most of which come from China.

The president of EE. UU He has always spoken hard when it comes to trade, especially with respect to China.

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However, much of the US solar industry expects Trump to maintain fire on this issue, as he has done in others . Far from protecting American companies, the decision could kill tens of thousands of jobs in the United States, according to a leading trade group.

"The proposed rates are a direct attack on American workers and the burgeoning solar industry in this country," said David Bywater, CEO of the leading renewable energy company Vivint Solar ( VSLR ) .

How do we get here?

USA UU It is one of the world's largest markets for solar energy and pioneered its key technologies.

In recent years, experts say that China has lent support to its own solar manufacturers through cheap loans and subsidies. That reduced costs and caused a flood of cheap solar panels in markets such as the US. UU And Europe.

"Some solar manufacturers based in the US can not compete with low-cost imports," said Edward Barbier, professor of economics at the University of Colorado.

That led the Obama administration to apply tariffs on some Chinese solar imports five years ago, and more in 2014.

Related: Trump's main trade problems: where they are

They have not had much impact. Almost 90% of solar installations in the United States still use imported panels, mostly from Chinese companies, according to Greentech Media.

Chinese imports are still cheaper despite existing trade barriers, Barbier said.

What is happening now?

The dispute has now surfaced again.

Two US manufacturers of solar panels UU They filed a complaint with the US International Trade Commission last year, arguing that China's cheap imports had decimated their businesses.

The commission is now recommending tariffs of up to 35% for almost all imports of solar panels in the US. UU Trump has until January 26 to make a decision on its imposition.

Related: The new Pacific trade agreement could let the EU touch catchup

The new tariffs would be much wider than . They would apply to more components than the Obama era tariffs and would cover imports from all countries. But experts say that the main objective is clearly China.

USA UU They claimed last year that Chinese companies are opening manufacturing facilities in other countries to bypbad trade barriers.

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What does that mean for the US? U.S.?] 19659010. The new tariffs would be deeply unpopular for much of the US solar energy industry. UU

American companies have largely abandoned the manufacture of panels to focus on the installation of them and other related services. The vast majority of companies use panels imported from other countries, mainly China.

"These irrational tariffs would undermine US energy independence, our growing solar industry and our competition," said William Berger, executive director of Sunnova, based in Texas, one of the three largest solar companies in the US. . UU

Employment growth in the industry is 17 times faster than in the overall US economy. UU., According to a report last year from the International Renewable Energy Agency.

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The Solar Energy Industries Association, a large commercial agency, estimates that raising tariffs could effectively double the cost of the panels and put at risk up to 90,000 American jobs.

About 40,000 people are still working in the manufacture of solar panels in the United States. In that part of the industry companies prefer more tariffs.

Juergen Stein, CEO of SolarWorld Americas, one of the two companies that filed the complaint with the US Commerce Commission. UU., He said that the new rates would encourage the industry to invest more in manufacturing and innovation.

Stein questioned the industry badociation's claim that sanctions would cause thousands of job losses, saying his company would "rehire hundreds of workers immediately" if Trump raises the rates.

CNNMoney could not contact Suniva, the other US manufacturer. UU Who filed the commercial claim, to obtain comments. Suniva filed for bankruptcy last April, just before launching the case.

"A solid fee will allow Suniva to restart its factories and re-hire employees," Suniva spokesman Mark Paustenbach said, according to Reuters.

What happens next?

Experts predict that Trump will go ahead with higher tariffs on imports of solar energy.

The president has repeatedly expressed his frustration with the huge US trade deficit with China, his skepticism about climate change and his fondness for fossil fuel industries.

"Trump does not really care much about the solar industry," said Jonas Nahm, an badistant professor of energy at John Hopkins University. "This is a useful way for him to stay with China, which will be popular with its base."

Related: China is crushing the US UU In renewable energy

The measure could provoke retaliation by China against US commercial interests. UU., Risking a series of measures of an eye for an eye on both sides.

And Chinese solar panel manufacturers may not even care as much as they would have done in the past. Their sales within China are growing, according to Nahm, and they are also rapidly expanding their international customer base.

"They could find alternative markets if the United States becomes unattractive," he said.

CNNMoney (Hong Kong) First published on January 17, 2018: 9:42 PM ET

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