Last night’s announcement by U.S. president Donald Trump of a delay in the imposition of escalated tariffs on Chinese goods will offer a ray of light to American solar developers.
The president announced via a couple of tweets – how else? – that the planned escalation of tariffs on $200 billion worth of Chinese imports from 10% to 25% on Friday would be delayed after “substantial progress” was made in trade talks between the two nations.
Those retaliatory measures for what Trump sees as currency manipulation, the unfair application of state subsidies and intellectual property theft by the Chinese authorities included levies on steel and aluminum, affecting solar developers.
With Trump announcing plans to meet Chinese counterpart Xi Jinping in Florida to sign an agreement ending the trade stand-off if sufficient further progress is made in negotiations, a thawing in trade relations could also bode well for Chinese inverter makers who are currently laboring under a separate 10% tariff imposed by Trump in September.
Hope for inverters?
That levy was initially a 25% tariff imposed by The White House which was subsequently reduced, pending the outcome of negotiations between the two nations. The brevity inherent in the U.S. president’s social media vehicle of choice means only a broad brush announcement on trade tariffs were covered by last night’s update so it is not immediately clear if inverters would be helped by the apparent success in talks.
The same applies to the Section 201 tariff applied by the U.S. on imported Chinese solar cells and modules and a similar trade penalty on Chinese batteries. A 30% tariff slapped on cells and modules was reduced earlier this month to 25%, as stipulated when it was introduced in February 2018.
Trade talks between the countries had been extended into the weekend after a breakthrough on currency manipulation was announced last week. With state subsidies another bone of contention, the U.S. is seeking rigorous enforcement measures related to any agreement signed by Xi at a time when the readiness of the Chinese authorities to come to the aid of debt-saddled solar developer Panda Green starkly illustrates Trump’s point. The recent program announced by Beijing to encourage solar projects to be developed without central subsidies called on state lenders and local authorities to do their utmost to incentivize such developments – arguing a special case could be made because of the overriding need to reduce carbon emissions is likely to cut no ice in a White House which has firmly nailed its colors to the fossil fuel mast.
U.K. newspaper The Guardian this morning reported news of progress in talks between the two administrations lifted Asian shares in today’s trading, with the Shanghai exchange seeing a 3.5% rise.
Source: pv magazine