South Korea’s $1.2 billion worth solar panel exports to the United States are at risk of being hit by higher import tariffs after the U.S. federal trade agency concluded that cheap panel imports have caused “serious injury” to the domestic industry in line with President Donald Trump’s promise to reactivate long-dormant protectionist trade rules to help local industry and jobs under his “America First” slogan.
The U.S. International Trade Commission (U.S. ITC) in a 4-0 vote on Friday (local time) ruled that “increased imports of crystalline silicon photovoltaic cells…(is) a substantial cause of serious injury to the domestic industry producing an article like or directly competitive with the imported article.” The ITC is scheduled to hold a public hearing on October 3 and send its recommendation to the White House on November 13.
The president has until January 12 to decide the size, scope and duration of tariffs.
The Section 201 of the 1974 trade law that allows uniform protection against imports can be invoked when cheaper foreign products cause “serious injury” to domestic products regardless of any unfair and illegal practices by the foreign competitors. They had been popularly used against imports until the 1990s. The last time it was approved was on steel imports in 2002. They were removed after the World Trade Organization accused the U.S. protectionist rules went against global trade order.
The case began in April when American solar panel maker Suniva Inc. filed a complaint with the ITC, claiming that it became bankrupt due to cheap imported products from China, Malaysia, and South Korea.
Korea is the second biggest exporter of solar panels that are placed on rooftops or in solar farms after Malaysia by taking up 21 percent of U.S. imports. About 40 percent of the panel module shipments by Hanwha Q Cell Co. head to the U.S.
Hanwha Q Cell will argue its products mostly go to power large-scale solar farms and have not hurt the U.S. petitioner which mostly provides modules for residential use.
Korean makers are also awaiting another Section 201 petition ruling from the ITC on washing machines.
By Kim Jung-hwan
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