On June 2nd, American Department of Commerce ushered in a novel tariff through a ruling that was held in China.
GTM Research stated in a research paper that the cost of exported modules in the US will be increased by 14% by the Research company. Over the years, the prices of solar panels have been reduced by over 25% in the US by suppliers from China. That has agitated the rise of solar usage in America.
Projected Chinese Module Prices
This project was done under a research paper, The 2014 U.S China Solar Trade Dispute. This paper was meant to work on the strategies and other impacts on the market. It stated that the ruling could compel the suppliers to look for options for value chain strategies, other than just increasing the delivery cost in the US.
The Greentech Media report
The organization predicated that the suppliers would not be able to preserve their initial shipment strategies. This was on the basis of the final margins exceeding the 27% average of the primary invalidate duty margins. This also included the antidumping components and the countervailing duty. It was expected by the GTM Research that other suppliers would ship into the US 100% China products. The suppliers would pay the under-order import tariffs that were obligated in the solar trade case of 2012. On the other hand, some suppliers would trade via OEM manufacturing in South Korea, India, Mexico or Poland, or even internally. 31% of the solar modules that are installed in America are Chinese brands, supplied in 2013. The Chinese companies also supplied more than half of the units in the overall solar market.
The Greentech Media report realized that other suppliers, who are not Chinese, would enjoy the share due to the attrition of the Chinese products in America. Among the top possible beneficiaries are LG Solar, SolarWorld, REC and Suniva, in the distributed solar market. In the utility market, First Solar is the likely beneficiary.
Even though the increase in module prices of Chinese products by 7 – 20% might pose slight effect in the American market, it will highly affect the utility solar market. It is expected by the GTM Research that some projects will look for options for the module suppliers, though some would not.
So Did The Us Government Serve Justice On The Solar Panels Tariffs?
The foreign policy is normally sophisticated, susceptible and a divisive issue that is difficult to understand, explain or come up with a conclusion about it. The traffic will probably increase the Chinese solar module costs, which could end up distorting the China-America relationship. Apart from that, the act could lead to an increase of solar panels. Though investing in the American economy in order to kindle it is not such a bad idea.
Do These Two Scrutinies Correspond?
First of all, when you buy Chinese solar panels, the money is injected into their economy and not the American economy. For that matter, despite the fact of the units being cheap, the money does not support the US economy by buying Chinese products. In such situations, where countries have product sales war, it is important to comprehend the money flow. It would be beneficial if an American company sells Chinese manufactured solar panels. Currently, this is what is happening, and it benefits both China and America.
On the other hand, if you have bought American manufactured solar panels, from a US company, then that company would enjoy 100% benefits and that would create more job opportunities in the country.
Nevertheless, if the traffic imposed causes the costs to increase, then that might lead to lower demand and limited job opportunities in the solar market. The majority of people believe that the loss of jobs in the solar market is more than its gain in the manufacturing market. Other than that, the new traffics will devastate the US-China relationship. This is because the new traffics would cause shifting of demands by clients from one product to another. The Chinese would be affected by the price change while the Americans would choose not to buy the Chinese products. This will most definitely affect the entire solar market. Both the utility market and the top manufacturing market. Few people might be needed in the manufacturing industry since the demand is low. So, with all the thoughts and facts, do you think the tariff is worth it?