The Brattle Group has issued an economic analysis on the impact of a 100 percent tariff on PV cells imported from China.
Keep in mind that the study was commissioned by CASE, the Coalition for Affordable Solar Energy -- the group that opposes the tariffs sought by SolarWorld and its anti-dumping claims with the Department of Commerce.
Jigar Shah, President of CASE, said, "We are greatly concerned over the adverse impact of tariffs." He called the likely job losses "staggering" and potentially "devastating" to American workers.
The report looked at 50 percent and 100 percent tariff scenarios. The author of the report said a 50 percent tariff will effectively shut the majority of Chinese imports out of the U.S. and result in a job loss of 15,000 to 50,000 -- even accounting for production gains in the U.S. The report also considers that impact of Chinese retaliation in importing polysilicon, which could result in a loss of 11,000 jobs in 2012, for a total of up to 60,000 jobs lost by 2014.
The author of the report did acknowledge that there would be some gains among U.S.-based module producers -- albeit at higher module prices. GTM Research's Shyam Mehta has said that only about 6 percent of the world's solar panels are made in the U.S., all in highly automated factories. In other words, solar panel manufacturing is not a labor- or jobs-rich industry in this country. The jobs are created in downstream solar industries such as installation and project development.
According to The Brattle Group’s analysis, the imposition of tariffs will “slow the growth in domestic demand for photovoltaic systems by homeowners, commercial establishments and power producers, resulting in substantial job losses.”
Both tariff scenarios are lower than the up to 250 percent tariffs sought by SolarWorld.
In a press release, Jigar Shah also noted that "the findings of this study are consistent with a recent story (“Get-Tough Policy on Chinese Tires Falls Flat”) in The Wall Street Journal in regard to tariffs placed on Chinese tires. As the Journal reported, 'The measure was meant to whack imports of passenger and light-truck tires and give a boost to manufacturers and job creation in the U.S. Yet, for a variety of reasons, it has apparently done little of either -- and has surely raised prices for consumers.' The WSJ tire story is illustrative of the law of unintended consequences in these types of trade cases."
Shah added, “Imposing tariffs on imported Chinese solar modules will have the same perverse results.”
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