US hikes tariff on solar panels, India plans similar move

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India is reportedly planning to follow the United States in imposing a steep hike in tariffs on imported solar panels.

President Donald Trump on Monday approved a 30 percent tariff on solar cells and modules in the first year, with the rate declining before being phased out after four years.

The move, which will hit exporters in China hardest, is based on recommendations made by the US International Trade Commission (ITC). It was announced alongside a hike in tariffs on washing machines.

Robert Lighthizer, US Trade Representative in a statement, said, "The president's action makes clear again that the Trump administration will always defend American workers, farmers, ranchers, and businesses in this regard."

India is also planning a 70 percent import duty on imported solar panels to protect its solar panel manufacturers, the Financial Times reported.

The ITC submitted its recommendations in December after concluding that China was unfairly subsidizing its solar manufacturers from 2005 onwards. The tariffs were also demanded last year by Suniva Inc, a solar manufacturer that filed for bankruptcy protection in April. SolarWorld also made a similar demand.

A production operator checks a panel at the SolarWorld solar panel factory in Hillsboro, Oregon, US, on January 15. /VCG Photo

There is no tariff on 2.5 gigawatts of unassembled solar cells.

China's Ministry of Commerce expressed "strong dissatisfaction" with the decision as did the US Solar Energy Industry Association (SEIA) which said it will lead to job losses and adversely impact investment.

“This decision will cause roughly 23,000 American jobs to be lost this year, including many in manufacturing, and will cancel of billions of dollars in investments in the US economy,” SEIA tweeted.

The Financial Times said India’s Director General of Safeguards (DGS) is working on a proposal to recommend 70 percent tariff on imported solar panels for at least 200 days.

The tariff is demanded by a group of panel producers led by India’s largest solar equipment manufacturer Adani Group. However, renewable energy companies are protesting against a hike.

They claim that an increase will adversely affect Prime Minister Narendra Modi's ambitious plan to build 100 gigawatts of solar power by 2022.

The US also raised tariffs on washing machines. Imported large residential washing machines will now attract a 20 percent tariff on the first 1.2 million imported machines in the first year.

Machines imported above that number will attract a 50 percent tariff. The imposed tariffs will start to decline to 16 percent and 40 percent respectively from the third year onward.

In case of washing machines, Whirlpool was demanding safeguards against South Korean giants Samsung Electronics and LG Electronics. Whirlpool, Suniva and SolarWorld are protected by a 1974 trade law that allows companies trade protection if they can prove damage to their profits from a rise in imports from other countries.