Trump tariff on imported solar panels, washing machines to impact local costs

KANSAS CITY, Mo.  President Donald Trump is signing a measure Tuesday imposing tariffs on imported solar-energy components and large washing machines in a bid to help U.S. manufacturers.

The administration says the decision is part of Trump's pledge to put American companies and jobs first, but local solar companies that rely on the low cost of imported solar products may now have to cut jobs and increase costs to their American consumers to make ends meet. 

The administration is imposing an immediate tariff of 30 percent on most imported solar modules, with the rate declining before phasing out after four years. For large residential washing machines, tariffs will start at up to 50 percent and phase out after three years.

SPLIT ISSUE

The U.S. solar industry is split over the issue. Two small subsidiaries of foreign companies that made solar cells in the U.S. favor tariffs, but a larger number of companies that install solar-power systems say their costs will rise and jobs will be lost.

"The president's action makes clear again that the Trump administration will always defend American workers, farmers, ranchers, and businesses in this regard," U.S. Trade Representative Robert Lighthizer said in a statement announcing the decision.

Not everyone agrees the move will work in favor of Americans, including Nebraska Republican Sen. Ben Sasse, who says his fellow Republicans need to understand that tariffs are a tax on consumers.

"Moms and dads shopping on a budget for a new washing machine will pay for this — not big companies," Sasse said in a statement.

Suniva is a US-based subsidiary of a Chinese solar manufacturing company, which declared bankruptcy last April, and it has said it wants even higher tariffs than those recommended by the trade commission.

Suniva spokesman Mark Paustenbach called tariffs "a step forward for this high-tech solar-manufacturing industry we pioneered right here in America."

However, solar installers and manufacturers of other equipment used to run solar-power systems opposed tariffs, which they said will raise their prices and hurt demand for the renewable energy.

The Solar Energy Industries Association, which represents installation companies, said billions of dollars of solar investment will be delayed or canceled, leading to the loss of 23,000 jobs this year. Overall, about 260,000 Americans worked in the solar industry around the start of 2018, up 24 percent from 2015, according to the International Renewable Energy Agency. 

"I believe there will be companies laying people off. We now have to increase our sale price to accommodate that tariff price,” said Ben Egan, CEO of solar panel installation company Arres, Inc. Egan has more than a decade of experience in the industry operating under tax incentives and other parameters in multiple states. 

Egan's company leans on the lower cost of imported solar panel materials, as do many U.S. businesses in the field. When those costs go up, his bottom line has to adjust accordingly, he said, either passing the cost on to his customers or carving a chunk from the resources within his company. 

“I don’t think this is going to save jobs, by any means,” said Clay Olson, an attorney at Harper Whitwell PLLC. Olson says he focuses a large part of his practice on cases for solar contractors, solar material suppliers and lenders involved in the solar industry.

“Solar is a tough sell, anyway. You don’t need any kind of disturbing the waters," said Olson. "Consumers are already on the fence about solar investment; states are on the fence about this with tax credits already.”

Egan and Olson both voiced concerns that the political "optics" of the tariff are misleading, pointing to the initial petition from Suniva and SunWorld -- both foreign companies that have U.S. subsidiaries. 

Congress has no authority to change or veto Trump's decision. Countries affected by the decision can appeal to the World Trade Organization. Mexico, China and others have already announced plans to consider that option.

LOCAL IMPACT

Ted Lesiecki is the co-founder of Sunsmart Technologies in Gladstone. Lesiecki does not agree with the decision by Trump. 

"Huge roadblocks. Increasing solar panel prices overnight by 30 percent is going to be a really big stumble for the industry and community," said Lesiecki. 

For Lesiecki and his company, he says they buy imported products because it's better for the customer. 

"The reason why people generally want one with imported panels is because it is cost-effective," said Lesiecki. "America just isn't there yet. If we would catch up, we wouldn't have to get imports, but we don't see America currently fighting for that." 

Because of the spike in cost to buy products, some companies will be faced with the decision to pass that cost on to customers or find another solution. 

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Writers and editors for KSHB-TV, CNN Money and the Associated Press contributed to this report.