Trump Slaps Tariffs On Chinese PV Inverters

• PV inverters from China being imported into the US market will now have to pay 10% tariff, as instructed by the US President Donald Trump
• The President has imposed these tariffs on $200 billion worth of imports from China that includes PV inverters
• The 10% tariff will need to be paid from September 24, 2018, and from January 1, 2018 it will increase to 25%
• According to a statement from Trump, in case China comes back with retaliatory tariffs, the US will follow up with a third phase of tariffs on around $267 billion of additional Chinese imports

US President Donald Trump has approved the second phase of tariffs on Chinese imports worth $200 billion that finally brings PV inverters in its ambit. Initially there is a 10% tariff with effect from September 24, 2018. It will then increase to 25% from January 1, 2019.

In an official statement justifying the action under Section 301, Trump said China is engaged in 'numerous unfair policies and practices relating to United States technology and intellectual property – such as forcing United States companies to transfer technology to Chinese counterparts. These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy'.

China has been retaliating with its own set of tariffs on US goods entering its country. The US President also warned of initiating a third phase of tariffs on some $267 billion of additional imports from the Asian giant, if China takes 'retaliatory action against our farmers or other industries'.

In July 2018, the Office of US Trade Representative (USTR) released a list targeting a 10% tariff on $200 billion worth of goods imported from China which hinted at the inclusion of PV inverters (see Fresh Wave Of US Tariffs Might Include Inverters).

It prompted some inverter makers to take precautionary measures and shift their production fabs out of China. Very recently in September 2018 itself, Enphase Energy said it will add additional manufacturing line in Mexico at Flex facility to prepare against Section 301 imposition (see Enphase To Manufacture At Flex Fab In Mexico).

According to GTM of the Wood Mackenzie Power & Renewables, these tariffs will positively impact SMA, Sungrow, Schneider Electric and Power Electronics as these companies have manufacturing bases in India and Europe. The ones who will feel the pinch include Huawei whose entire supply chain is based in China. Residential market will be severely impacted, it says.

Earlier this year, the US government had imposed a 25% tariff on $50 billion of Chinese goods into the country that formed phase one. Before this, in January 2018, it had already levied a 30% import tariff (Section 201) on imported solar cells and modules (see Trump Slaps 30% Tariff On Imported Cells & Modules).

On Sept. 18, the USTR excluded SunPower from the 30% Section 201 import tariffs for its back-contact solar cells and modules. That makes SunPower the only company to serve the US market with tariff free modules imported from outside the US. Industry experts are now discussing if this makes superfluous SunPower's ongoing acquisition of SolarWorld Americas, which owns a 400 MW mono PERC cell and 600 MW module production capacity in the US, or if the exemption was granted as part of the acquisition deal.