Height Securities Expects Rollback Of Solar Tariff Amid Global Challenges

The international solar community is in an uproar over a hefty import tax the U.S. Customs and Border Protection agency enacted in January on crystalline silicon photovoltaic cells. The pushback might just change minds in Washington, D.C., according to Height Securities. 

“We continue to believe the Trump administration will eventually roll back the 30-percent tariffs on panels as retaliation from more significant injured parties, like China, intensifies,” Height Securities analyst Katie Bays said in a Thursday note.

Three Canadian solar panel manufacturers filed a lawsuit with the U.S. Court of International Trade alleging violation of the Trade Act of 1974 and the NAFTA Implementation Act, Bays said. 

The former requires trade representatives to act on recommendation from the International Trade Commission, which had omitted Canada from its assessment of injurious competitors. The latter precludes quantitative restrictions on goods.

The plaintiffs will deliver oral arguments Feb. 26 and Height said it has no visibility on the outcome.

“It will be interesting to see how the USCIT dispute plays out — and whether a decision is expedited — given the backdrop of ongoing NAFTA negotiations,” Bays said, anticipating no meaningful impact on NAFTA discussions.

The analyst said she anticipates success in concurrent challenges by the European Union, China, Taiwan and South Korea that were filed with the World Trade Organization.

“We anticipate the WTO process will be fairly straightforward, with the panel likely siding with the plaintiffs,” the analyst said.

The decision will affect First Solar, Inc. FSLR, Canadian Solar Inc. CSIQ, SunPower Corporation SPWR, SunRun Inc RUN, Solaredge Technologies Inc SEDG, JA Solar Holdings Co., Ltd. (ADR) JASO, JinkoSolar Holding Co., Ltd. JKS and Guggenheim Solar ETF TAN.

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