U.S. Tariff on China-Made Inverters May Shoot Up to 25%

published: 2019-05-10 14:26 | editor: | category: News

Shipment of China-made inverters has been overshadowed by tweet posted by U.S. President Donald Trump on May 5 threatening to impose 25% punitive tariff, up from 10% now, on US$200 billion worth of China-made products, including inverter.

Outlook for China-made PV power products has become quite bleak since the outbreak of Sino-U.S. trade war, due to the imposition of 30% tariff imposed on China-made PV cells and modules on Jan. 22, 2018 under "Section 201" and extra 10% tariff on US$200 billion worth of China-made products last July, under "Section 301," to be raised to 25% in early 2019, a plan which was granted a three-month grace period following summit meeting between Donald Trump and Xi Jinping in early Dec.

In his Twitter, Trump not only refused to extend the grace period for the 25% tariff but also threatened to apply the 25% punitive tariff to US$325 billion worth of other China-made products, should China continue refusing to accept U.S. demands.

The 25% punitive tariff, should it be materialized, will accelerate the exodus of PV inverter makers from China, shifting the focus of their manufacturing to their production bases in other regions.

Starting from Q2, Flex, for instance, will supply inverters to its U.S. customer Ehphase from its Mexican factory, rather than Chinese one, giving a great relief to the latter, due to need to share the burden from extra tariff. It remains to be seen, though, whether the Mexican factory can fill the void, in terms of capacity and yield rate.

By comparison, SolarEdge, Ehphase's rival, is largely immune from the crossfire of the trade war, as its production bases are mostly located in Europe and North America. The impact on Chinese inverter manufacturer Sungrow is also relatively moderate, thanks to its 3 GW factory in India.

Chinese inverter manufacturers with production bases in China only are not so lucky, though, including Huawei, TBEA, Goodwe, Ginlong, and Chint.

The impact on large-power central inverters for utility use is smaller than residential inverter, as China-made products still enjoy price competitiveness, vis-a-vis European-made ones, even with the imposition of 25% tariff.

(Cooperative media: TechNews, first photo courtesy of pixabay)

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