Tariffs impacting Chinese inverters and AC modules rise to 25%
The stalling period has appeared to have come to an end. Although there’s no confirmation yet from The White House or Office of the U.S. Trade Representative, Reuters is reporting the Trump administration raised tariffs on $200 billion worth of Chinese imports from 10 to 25% at 12:01 a.m. on Friday, May 10.
….The process has begun to place additional Tariffs at 25% on the remaining 325 Billion Dollars. The U.S. only sells China approximately 100 Billion Dollars of goods & products, a very big imbalance. With the over 100 Billion Dollars in Tariffs that we take in, we will buy…..
— Donald J. Trump (@realDonaldTrump) May 10, 2019
These tariffs include inverters (8504.40.95: Static converters), AC modules (8501.61.00: AC generators of an output not exceeding 75 kVA) and non-lithium-ion batteries (those made of manganese dioxide, mercuric oxide, lead acid, nickel cadmium or nickel iron).
In January, Solar Power World asked Chinese inverter manufacturers how they’re preparing for the possibility of tariffs jumping from 10 to 25%. Some China-headquartered companies assumed tariffs would be inevitable as soon as Trump became president. Sungrow preemptively took over a facility in Bangalore, India, with 3 GW of annual production capacity in case a trade war began. A spokesperson said it would move 100% of U.S. inverter production to that plant if the tariffs increased to 25%.
Similarly, microinverter manufacturer Enphase announced in September 2018 it expanded its contract with multinational technological manufacturer Flex in Mexico as part of a mitigation plan for the tariffs. It planned to move production of microinverters for the U.S. market to Flex starting this quarter. Click here to read about how other inverter manufacturers were preparing for high tariffs.
Out of the 18 company reps that answered Solar Power World’s solar inverter manufacturing survey, more than half said their companies would be affected in some way by the Chinese tariffs. It seems manufacturers were realistic about the possibility of the tariff hike, but time will tell whether their preparation efforts were enough to weather the higher tariff’s impact.