SOLAR

Suniva met with Trump trade officials before seeking tariffs

The solar company asking the U.S. government to slap tariffs on its global competitors was in talks with President Trump's trade officials a month before the proposal was made, according to emails obtained by E&E News.

The messages are correspondence between Suniva Inc., a bankrupt solar manufacturer based in Georgia, and the Office of the U.S. Trade Representative (USTR), which has a crucial role in deciding whether the United States imposes tariffs on solar components from around the world and how big those barriers will be.

The timing of the emails is important because both sides in the tariff debate have fervently sought to influence the president. A duo of solar manufacturers, led by Suniva, say they will perish without protection from cheap Asian imports, while most of the rest of the solar industry worries that tariffs will make solar unaffordable and will cause the sector's 260,000 jobs to evaporate.

The emails show that advocates of tariffs have been pressing their case since at least March, before the rest of the solar industry knew the prospect of a tariff existed.

E&E News received the emails via a Freedom of Information Act request with USTR, which is the federal agency that advises the president on trade policy.

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The chain of messages is between a Suniva executive and the company's lawyers, on one side, and senior officials at USTR, on the other. The first email, dated March 29, is from Matt Card, an executive vice president at Suniva, to Bradford Ward, who is the director of USTR's Interagency Trade Enforcement Center.

"First, thank you very much for your time and consideration yesterday. Throughout this process to-date, I have greatly appreciated your candor, and more importantly, your spirit of helpfulness as Suniva has looked to begin this process. The damage being done to the US Solar Manufacturing industry is real and severe — but I am hopeful that meaningful change can occur," Card said.

Suniva did not respond to a query from E&E News about when the "process" with USTR began.

Tomorrow morning, USTR will hold a public hearing on the issue of solar tariffs. USTR plays a far larger role in this case than it does in other tariff decisions. That's because the law that Suniva invoked — Section 201 of the Trade Act of 1974 — is rarely used and has unusual provisions.

Since it creates a worldwide trade wall, rather than one targeted at an individual country, the law puts the momentous decision in the hands of the president, with advice from USTR. In many other tariff disputes, USTR and the president have no formal role.

It is not unusual for a company filing a trade petition to reach out to USTR or other commerce officials, according to a trade lawyer not connected to the case. Trade officials, he added, like to know what's coming.

"There's nothing conspiratorial about it," said Mark Herlach, a trade lawyer with the firm Eversheds Sutherland LLP. "In fact, it would be foolish not to talk to USTR in advance."

In a statement to E&E News, Suniva said, "Just as [the Solar Energy Industries Association] and others who oppose saving American solar manufacturing jobs have done, we've reached out to the administration and kept them up-to-date on our efforts to save American high tech manufacturing jobs in the face of cheating by China."

SEIA, a solar lobbying group that has led the opposition to tariffs, said it also met with USTR, though it did so well after Suniva did. "We have had multiple meetings with USTR officials since the case was filed," said Alexandra Hobson, a SEIA spokeswoman.

Trade shop in the loop

The correspondence between Suniva and USTR pre-dates other milestones in the trade case. Suniva filed for bankruptcy protection on April 17 and then lodged its petition for trade relief with the U.S. International Trade Commission (ITC) on April 26.

The email string was begun on the same day that Suniva announced the layoffs of most of its workforce at its factories in suburban Atlanta and in Saginaw, Mich. — plants that since have been shut down, awaiting the outcome of the tariff decision.

"As I indicated yesterday, Suniva took serious steps today in its ongoing attempts to fight through the ongoing attack of overcapacitied foreign imports, resulting in a significant reduction in force of both our Atlanta and Michigan workforces," Card wrote to Ward.

Responses from Ward of USTR were brief.

"Though very unfortunate, thank you for keeping us apprised," he replied.

When Suniva started its conversation with USTR, it knew that a long and uncertain road lay between it and its goal of having the president impose global tariffs.

The case would have to be accepted for consideration by the ITC, which hadn't heard a Section 201 case in 16 years. Then the commission would have to rule in favor of tariffs, and then make recommendations to the president about what to do. Only then would USTR play a significant role in shaping the response.

All of those events came to pass.

On May 23, the ITC accepted Suniva's case, and two days later, that case became stronger when SolarWorld Americas, the only significant surviving U.S. solar manufacturer and a winning veteran of other trade battles, joined the case as a co-petitioner.

Both Suniva and SolarWorld make crystalline-silicon photovoltaic solar modules and cells, a technology invented in the United States that has become the world's most common. However, a deluge of inexpensive cells and modules, mostly from Asia, has put most domestic makers out of business.

On Sept. 22, the ITC ruled that imports are causing "serious injury" to domestic solar manufacturers, and on Oct. 31, the commission sent recommendations to the Trump administration. Those recommendations, for a tariff as high as 35 percent on imported solar modules, made no one happy; Suniva and SolarWorld labeled them as too low to give sufficient protection, while SEIA and other tariff opponents say they are too high to keep solar affordable.

The emails reveal that USTR was in the loop as the company prepared to submit papers to the ITC.

On April 21, Matthew McConkey, Suniva's chief trade lawyer, wrote to Ward and other senior USTR officials, saying, "Gentlemen — As a head's up we are not filing the 201 today."

The case was filed five days later, on April 26.

Suniva and USTR also had phone conversation about the trade case on May 23, according to another chain of scheduling emails obtained by E&E News.

By law, Trump has until Jan. 12 to make his decision, though the U.S. trade representative, Robert Lighthizer, asked the ITC for additional information that resets that clock, giving Trump until Jan. 26.

Ward, formerly USTR's deputy general counsel, held his current position as head of the Interagency Trade Enforcement Center under President Obama. The description of his center's mission on USTR's website hasn't changed since Trump took office. It "is to level the playing field for American workers and exporters by bringing a more aggressive 'whole-of-government' approach to addressing unfair trade practices, and to enhance significantly the capabilities of the United States to challenge unfair trade practices around the world."

At least one professional connection exists between Suniva's lawyers and the USTR officials who were included the email string.

Tim Reif, a senior adviser at USTR and its former general counsel, was on the email list, as was Warren Payne, another one of Suniva's lawyers. Reif and Payne both worked at the trade section of the House Ways and Means Committee a decade ago.

Twitter: @DavidFerris Email: dferris@eenews.net

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