How Trump's Mexico Tariffs Could Impact Solar

How Trump's Mexico Tariffs Could Impact Solar

With Chinese import tariffs already causing price increases for American solar, the industry has been understandably antsy about President Donald Trump’s recent talk of imposing import tariffs on Mexico as well.

The possible tariff was conceived as a point of leverage against Mexico. In an effort to reduce illegal immigration, the Trump administration is putting pressure on the country to take action on their end.

Originally, there were plans to implement a 5% tariff on all Mexican goods this June. They would then be increased every month, up to 25%, if Mexico failed to do enough to strengthen its border control.

A Whitehouse press release stated “If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed”.

But on June 7th, a joint declaration was released. The agreement made clear that Mexico is cooperating to clamp down on illegal border crossings.

Vice President Mike Pence Tweeted “[Trump’s] strong stand got Mexico to do things they have never done before: 6,000 National Guard at their southern border, immigration checkpoints throughout Mexico & allow ALL illegal immigrants from Central America to remain in Mexico pending their asylum claims…”.

“Against nearly insurmountable odds, President Trump proved his critics wrong once again by getting Mexico to agree Friday to step up its efforts to reduce illegal immigration to the U.S. This is a victory not just for the president but for the U.S., because it will strengthen our national security and uphold the rule of law,” said National Border Control Council President, Brandon Judd.

This comes as a relief to many solar companies. However, the industry can’t rest easy quite yet. The tariffs are still on the table if Mexico doesn’t uphold its end of the deal. The agreement still needs to be approved by the country’s legislature.

Companies who moved or are considering moving their solar product manufacturing to Mexico remain anxious. Enphase, for example, recently moved their inverter manufacturing from China to Mexico in order to avoid the Chinese tariffs. But if the deal breaks down and the Mexican tariffs are imposed, then the move may have been for naught. Solar panel manufacturer Sunpower will also be looking at steep financial consequences.

Should the tariffs be implemented, the whole solar industry could suffer, right down to solar customers. Just as the Chinese tariffs resulted in a price increase for system installations, so too could the Mexican tariffs further raise prices.

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