President Donald Trump is back in the news today, as the CEO of SunPower blames the president’s recent tariff on the industry for the company’s layoffs. Tom Werner claims that his company is in the process of laying off 150 – 250 workers following Trump’s 30% tariffs imposed on the industry.
SunPower is expecting to suffer losses of up to $50 million this year.
Werner claims that the company’s layoffs will result in a 10% operational cost savings. The tariffs are part of an executive order which Trump signed in January 2018. “You’re going to have people getting jobs again and we’re going to make our own product again. It’s been a long time,” stated Trump.
The issue, according to the New York Times, is that 86% of businesses in the industry are involved in installing panels. Less than 15% are involved in the production of solar panels, which is having the biggest impact on installers. The $28 billion industry relies heavily on imported solar panels. Tariffs were put in place to help American solar panel manufacturers compete with cheaper Chinese products.
The industry imports 80% of products that they use.
Werner fears that the tariffs will result in severe losses in the future. He claims losses may rise to $100 million. Factory expansions may also be at risk. SunPower previously planned a $20 million investment in factories and job creation before the tariffs were imposed.
Werner, along with many other solar company executives, have been attending meetings with the US Trade Representatives, Department of Energy and the Department of Commerce to discuss the matter. He hopes that a tariff exemption will be provided in the future.
SunPower claims that without an exemption, the company will be forced to cut more jobs. The company says it simply does not have the finances to be able to maintain current staff levels with the 30% tariff in place.
Annual job losses this year due to the tariffs may be as high as 23,000. U.S. solar installation growth is expected to fall 10% – 15% in the next five years as a result of the higher tariff costs. Smaller businesses that create blue-collar jobs are questioning the reason for the high tariffs, claiming that they’ll reduce jobs – not create them.
Cities moving to solar LED street lights may have to rethink their plans, as rising costs will be passed on to the consumer. Two companies requested a tariff on the solar industry: SolarWorld and Suniva.
The two companies in question are majority owned by China and Germany.
China has also come out against the tariffs, claiming that the U.S.’s decision to impose tariffs is an overreaction. China claims that the country is highly dissatisfied with the decision to impose tariffs and claims that the tariffs are an abuse of trade.
Cities have been moving toward LED and solar panel options to save on energy bills. North Shores expects to save $22,000 annually on energy bills through a series of three upgrades that will cost the city $115,000.
The impact of solar tariffs will make it costlier for cities that want to install solar power systems to reduce long-term energy costs.