WASHINGTON — In Costa Nicolaou’s 10 years running a North Andover-based solar company, he never chose to invest his time and money on Washington lobbying.
But now that President Trump is weighing tariffs that could deal a blow to his business, Nicolaou, whose PanelClaw company makes mountings for solar panels, now spends hours each day navigating the politics of his industry.
If the president chooses to slap new tariffs on imported solar panels, as the US International Trade Commission has recommended, many executives predict their businesses will take a hit as the price of solar panels rises and demand for the renewable energy source drops.
“Our message to the president and the president’s advisers is: Don’t walk the president into a trap,” Nicolaou said. “Don’t give him a false victory that comes back to cost him jobs.”
The president’s ruling on this case could become his first major trade policy decision in office. But the battle over the future of the US solar industry shows that intervening in complex global trade issues defies the simplicity of Trump’s hard-nosed, protectionist rhetoric.
In deciding the fate of this case, Trump must consider the divided interests of the nation’s solar industry: the dwindling manufacturers who make solar panels on US soil and a broader universe of companies who sell or install the systems and make accessory products like
Trump’s upcoming decision to tariff or not to tariff concerns a case filed earlier this year with the ITC, an independent federal agency that recommends trade policy to the president. In the case, two US manufacturers of solar panels — Suniva and SolarWorld Americas— asked for relief from the damage they say low-cost “dumping” of Chinese panels has inflicted on their business.
In October, the ITC issued recommendations that included up to a 35 percent tariff on imported solar panels for a period of four years, as well as limits on imports, and the president has until January to decide the companies’ fate. Trump, who once threatened to impose a 45 percent tariff on imports from China, could choose to enforce an even higher rate than advised.
In his testimony to the ITC, Suniva lawyer Matthew McConkey argued that tariffs would revive American solar panel manufacturing, breathing life into depleted companies like the one he represents by attracting business to the United States.
“This is about bringing investment back to the American solar manufacturing sector and creating a healthy solar industry overall,” said Suniva spokesman Mark Paustenbach, in a prepared statement.
The case has already roiled the rest of the domestic solar industry, with the main trade association warning that approval of the petitioners’ initial request for a 40 cents-per-watt duty on imported solar cells and a floor price for modules could eliminate 88,000 solar jobs in the country.
The $154 billion US solar industry claimed about 260,000 jobs in 2016, according to the non-profit Solar Foundation.
Massachusetts, which has the second highest number of solar industry jobs in the country after California, stands to lose from tariffs. The Solar Energy Industries Association estimates that, if Trump fulfills the petitioners’ demand, Massachusetts could lose up to 2,000 solar industry jobs in two years.
In response, solar business owners in the state say they’re planning for the worst.
“The man does not act rationally or consistently, and so we’re hoping that he feels good the morning he wakes up when he has this decision to make,” said Bill Stillinger, owner of a small-scale solar panel installer based in Western Massachusetts. Stillinger expects new tariffs would harm his business.
McConkey, the Suniva lawyer, called the solar trade group’s predictions “doomsday outcomes.” These dueling narratives mean Trump will have to decide which part of the industry he wants to support, said Joseph Aldy, an associate professor of public policy at Harvard.
If Trump decides in favor of the tariff, he’ll also be pitting himself up against some prominent conservative voices, including The Heritage Foundation think tank and the Koch brothers-backed American Legislative Exchange Council. These right-leaning opponents of the tariff argue it is a protectionist measure that would invite retaliation from trading partners and destroy American jobs in a growing sector.
On the whole, solar industry jobs are on the rise in the United States, with a 25 percent increase in the workforce in 2016, according to the Bureau of Labor Statistics. But fewer than 20 percent of those jobs are in manufacturing. The bulk of them are in construction, installation, and professional services.
Even fewer are in manufacturing of solar panels, considering the United States claims only a sliver of solar panels production worldwide. In 2015, the US produced just 2 percent of the world’s solar panels, while China made nearly 70 percent.
It’s just the type of imbalance that Trump could be expected to lament. During his campaign, Trump said China was “raping” the United States on trade, and harped on a pattern of US manufacturing jobs moving overseas.
Trump’s tone changed dramatically on his recent trip to Asia. After meeting with China’s President Xi Jinping in Beijing, Trump told reporters he does not blame China for the multibillion-dollar trade imbalance with his country. “Who can blame a country for being able to take advantage of another country for the benefit of their citizens?” Trump asked.
Still, analysts say Trump could view slapping tariffs on Chinese solar imports as a fulfillment of a campaign promise that would please his base. Trump may see little consequence in disadvantaging the bulk of the solar industry, said Jonas Nahm, an assistant professor of energy, resources, and environment at Johns Hopkins School of Advanced International Studies. He already took a step down that path in October, when the Trump administration announced a rollback of the Obama administration’s Clean Power Plan, which would have given a boost to renewable energies like solar.
“The one thing where Trump has been very consistent is reversing any policy progress Obama has had,” Nahm said. “This is a way to get back at China, which would be politically popular, and to sort of harm an industry that is not supported by the administration.”
Tom Werner, chief executive of SunPower, a California-based company that manufacturers high-efficiency solar cells overseas, knew a Trump presidency wouldn’t bode well for his industry.
But Werner, who opposes the tariff because it would raise the price of his product, said he did not see anything like this coming. Because of the case filed with the International Trade Commission, Werner said the company lost a roughly $100 million deal with a utility company in Florida because he could not guarantee the stability of their prices.
Unlike with past presidential administrations, Werner said he isn’t sure which advisers Trump will listen to. His solution: Cast a wide net. Meeting with officials in the Department of Commerce, the National Economic Council, and the Office of the United State Trade Representative are just the start.
Despite his efforts, Werner’s confidence about which way Trump will lean on the tariff remains muddy. “Very uncertain would be an understatement,” he said.