SEOUL, Jan. 24 (Korea Bizwire) – The South Korea energy industry is expecting a significant sales drop in the U.S. as American trade authorities are set to impose so-called “safeguard” measures against imported solar cells and modules.
As U.S. President Donald Trump announced steep tariffs targeting imported washing machines and solar cells on Tuesday, speculation is growing that up to a third of South Korean exports to the U.S. could evaporate, sources close to the industry said.
Following the announcement by the U.S. International Trade Commission (ITC) that imported solar cells with an energy capacity of over 2.5 gigawatts will be subject to tariffs ranging from 30 to 15 percent over the next four years, an increasing number of South Korean solar energy companies are diverting their attention to other markets.
One official from Hanhwa Q Cells, the largest South Korean solar module manufacturer, said the company would turn its focus to the European, Japanese and Australian markets in the wake of the protectionist measures in the U.S.
“We can move our supplies to other markets now, instead of focusing on the U.S. market like in the past,” the official said.
In 2016, the U.S. imported solar cells and panels worth $8.3 billion, with South Korea exporting $1.3 billion in solar cells, becoming the third largest exporter after Malaysia and China, according to government data.
However, with the imposition of the new tariffs, which will raise the price of imported equipment, experts warn that the American solar energy industry could shrink in size by 10 to 30 percent, which is expected to have a significant impact on South Korea’s exports.
The U.S. government faced criticism at home after announcing the protectionist trade measures.
“While tariffs in this case will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs,” said Abigail Ross Hopper, the CEO of the Solar Energy Industries Association.
South Korea’s trade ministry said on Tuesday that it will file a petition with the World Trade Organization against the U.S. government over new tariffs on South Korean washing machines and solar panels, which the ministry calls a ‘violation of WTO provisions.’