Trump slaps big tariffs on imported solar panels in major escalation of a trade fight with China

Reporting from Washington —  The Trump administration announced Monday that it would impose hefty tariffs on the cheap, imported panels that have driven the rapid expansion of solar power in the United States, a move that industry groups warned would slow the spread of renewable energy and cost thousands of jobs.

The tariffs come as President Trump has vowed to take a tough line against cheap foreign imports that he blames for undercutting American manufacturing industries.

The administration also announced it would impose hefty tariffs on imported large residential washing machines. In both cases, inexpensive imports — mostly from China in the case of the solar panels — have undercut U.S. manufacturers, administration officials said.

Imports from China have been a particular target of Trump’s rhetoric. The tariffs are the most concrete step that he has taken to put those words into action. They mark the start of what many analysts expect will be a series of tougher actions on trade by Trump in the coming months, especially against China, with whom the U.S. has a huge trade deficit.

The administration also has taken moves against imports of Chinese-made steel and aluminum and is considering sweeping sanctions against China for allegedly stealing U.S. intellectual property and forcing American companies to hand over technology secrets to do business in China.

Trump acted after the government’s International Trade Commission “found that U.S. producers had been seriously injured by imports,” said U.S. Trade Representative Robert Lighthizer. “The president’s action makes clear again that the Trump administration will always defend American workers, farmers, ranchers and businesses.”

But the move against imported solar panels also threatens some of the very types of jobs that Trump has vowed to protect. Companies that install solar panels will probably trim their workforces, industry analysts warned, as the tariff — which starts at 30% on the imported panels and gradually declines each year — threatens to substantially raise the price of solar power in the United States.

Imposition of the tariffs drew protests from environmentalists, who said the move would set back efforts to combat global warming, and from the solar power industry.

The levies, said Abigail Ross Hopper, chief executive of the Solar Energy Industries Assn., “will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs.”

California, where the renewables industry has taken off, will be among the states hardest hit by the new levies.

The industry trade group estimates the tariffs on solar panels will cost 23,000 jobs nationwide within the year, and that billions of dollars in potential investment in solar power will evaporate because of them.

The move also drew protest from some Republicans who said it violated the party’s long-standing support for free trade.

“Here’s something Republicans used to understand: Tariffs are taxes on families,” said Sen. Ben Sasse (R-Neb.).

The case for tariffs was filed at the International Trade Commission by two American firms that say their businesses have been crushed by cheap imports from Asia and Europe, which by now account for more than 90% of the solar panels installed in the U.S.

The trade commission voted last month 4-0 in favor of imposing tariffs. It said the action was needed to confront the near-extinction of an American industry.

The commission found that the cheap imported panels had played a major role in a boom in solar power. The tripling of solar capacity in the U.S. was “spurred on by artificially low-priced solar cells and modules from China,” the commission said.

But the import boom also has contributed to more than two dozen U.S. solar manufacturers closing since 2012.

Government incentives in China have enabled its solar panel makers to produce 61% of the world’s solar panels, the trade commission said. In 2005, China produced just 7%.

Few analysts, however, beyond those hired by the firms that filed the trade petition, project the tariffs will revive the panel-manufacturing industry.

The companies that filed the complaint had pushed for far steeper tariffs than Trump ultimately imposed, aiming for a remedy that would have lifted the cost of imported panels from 35 cents per watt to 78 cents, which is around the cost of the American product.

Under Trump’s plan, the initial 30% tariff would decline by 5 percentage points each year. The tariff would last for four years. The first 2.5 gigawatts of imported solar panels would be exempted from the tariff each year.

The tariffs on washing machines are even steeper than those on solar panels: Trump approved tariffs of up to 50% on imports of finished washers as well as on major parts that go into them, such as plastic tubs and metal drums.

The tariffs, set for three years, were sought by the appliance maker Whirlpool Corp., which operates washer plants in the United States and employs about 15,000 manufacturing workers.

The action targeted two Korean companies, Samsung and LG, which have made significant gains in U.S. market share for residential washers in recent years. Both companies recently have moved to open assembly plants in the U.S., but the new tariffs on imported washer parts means that the machines will be more expensive for them to produce even on American soil.

Whirlpool argued that Samsung and LG were exporting washers at unfair prices and that they had repeatedly avoided previous country-specific tariffs by shifting production from Korea and Mexico to China and most recently to Thailand and Vietnam.

The unfair competition, Whirlpool said, had hurt its sales and curbed its employment, despite large investments at plants like the one in Clyde, Ohio, where some 3,000 people work.

“This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee,” Whirlpool Chairman Jeff M. Fettig said in a statement Monday.

But officials in South Carolina and Tennessee, where the two Korean companies have factories, had warned that a tariff could cost jobs in their states.

“Today’s announcement is a great loss for American consumers and workers,” Samsung said in a statement. “This tariff is a tax on every consumer who wants to buy a washing machine. Everyone will pay more, with fewer choices.”

The two firms that brought the solar case — Georgia-based Suniva, which is in bankruptcy, and Oregon-based Solar World Americas, a struggling subsidiary of the bankrupt German firm SolarWorld AG — sought relief through the filing of what is known as a “section 201” case.

That provision of the nation’s trade law allows the president to broadly impose tariffs if the trade commission finds the move is needed to protect an American industry from economic peril.

The provision had not been exercised since 2001, when President George W. Bush invoked it to protect U.S. steelmakers from imports. Other nations retaliated, and the World Trade Organization ultimately voided the levies.

The solar tariffs could ultimately meet the same fate. The World Trade Organization applies a high standard for proving injury. But even if it ultimately rejects the administration’s tariffs, the levies will remain in place until it does.

The firms applauded Trump’s move. “The president is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight,” said a statement from Suniva.

On the other side, the Natural Resources Defense Council, a leading environmental group, said the decision would reverse the progress toward greater use of solar energy.

“Higher-priced panels will dramatically reduce the pace of new solar energy installations, increase climate-changing emissions, and lead to significant job losses nationwide,” the group said.

evan.halper@latimes.com

Twitter: @evanhalper

UPDATES:

5:20 p.m.: The article was updated with additional details on the administration’s actions and additional reaction.

3:10 p.m.: The article was updated with additional reaction and additional news about tariffs on home appliances.

The article was first published at 2:20 p.m.