US Likely to Adopt Safeguard Measures on Solar Cells

On September 22, the United States International Trade Commission (USITC) unanimously determined that safeguard measures are necessary with regard to solar cells imported from countries such as South Korea. The commission is going to prepare protective measures and recommend the measures to U.S. President Donald Trump in the next step. The protective measures can include tariff imposition, an increase in tariff, import restrictions and tariff rate quotas (TRQ).

The USITC is planning to hold an additional public hearing on October 3 to collect more opinions from companies and governments before submitting its report to the U.S. President on November 13. The South Korean government is going to ask the commission to reconsider the determination based on the KORUS FTA.

The USITC started its investigation on May 17 at the request of Suniva and SolarWorld. Then, it held the first public hearing regarding the issue on August 15. There, the South Korean government claimed that solar cells exported from South Korea to the U.S. do not cause an unexpected and sudden increase in import and significant damage to the U.S. solar cell industry, which are two of the preconditions for the adoption of safeguard measures.

At present, Hanwha Q Cells, LG Electronics, Hyundai Heavy Industries Green Energy and so on are exporting solar cells from South Korea to the U.S. Last year, their exports to the U.S. totaled US$1.2 billion. “Import restrictions on solar cells have been opposed by none other than the Solar Energy Industries Association of the United States, which has said that such restrictions will negatively affect solar cell installation and construction in the United States by leading to an increase in the prices of solar panels and modules,” one of the companies explained, adding, “Although the USITC’s determination is to protect the U.S. solar cell industry, its follow-up measures will shrink the industry in the end.”

Likewise, 69 U.S. senators and representatives sent a letter to the USITC on September 11 to urge it to consider the potential negative effects of safeguard measures on imported solar cells. They mentioned in the letter that the measures are likely to cause 88,000 jobs to disappear in the U.S. in 2018 alone.

According to the Korea Photovoltaic Industry Association’s written opinion recently submitted to the USITC, South Korean solar cells in the U.S. market compete with not U.S. solar cells but those exported from third countries although it is true that solar cell exports from South Korea to the U.S. showed a year-on-year increase last year. “The South Korean solar cells in the market were mainly used in the utility sector while competing with few American companies and the solar cells used technology not owned by American companies,” it said, continuing, “Most of the modules supplied by South Korean manufacturers were 72-cell modules, which cannot be fully supplied by American companies, and the South Korean solar cells were not engaged in price dumping at all with their average price 15% higher than the average price of those imported from third countries.”