Category Archives: Tariffs

Temporary Tariff Reprieve For Chinese Solar Inverters

Temporary Tariff Reprieve For Chinese Solar Inverters

At a dinner meeting during the G-20 Summit in Argentina this weekend, President Trump and Chinese President Xi Jinping agreed to suspend further trade action for 90 days to allow for continued negotiations. A White House statement later indicated that the recently imposed Section 301 tariffs would temporarily remain at 10%. The tariffs were originally scheduled to increase to 25% on January 1, 2019. For the solar industry, the announcement means tariffs on Chinese inverters will remain at 10% for at least the next 90 days. In addition, U.S. module manufacturers that use Chinese inputs also avoid higher tariff rates.

The White House further stated that China agreed to purchase a “not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance” between the two countries. President Trump and President Xi also “agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.”

While Windmill Capital Management believes the temporary truce is encouraging, it seems unlikely a resolution can be found in 90 days. Negotiations to date have done little to address Trump Administration concerns and changes sought. in addition, solar developers and investors should recognize that the current reprieve and any future agreement would likely cover only Section 301 tariffs.  Section 201 tariffs on cells and modules and Section 232 tariffs on steel and aluminum are not expected to change.

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