Trade Commission Ruling Boosts U.S. Solar Stocks
Trade Commission Ruling Boosts U.S. Solar Stocks:- U.S. solar stocks are heading into the week on a high note following the U.S. International Trade Commission’s preliminary ruling that cheap imported solar panels are a threat to domestic solar producers. The ruling leaves the door open for President Donald Trump to step in with new restrictions on solar imports, including the possibility of a tariff.
First Solar (Nasdaq: FSLR) jumped 5.4 percent, while Canadian Solar (CSIQ) and SunPower Corp. (SPWR) gained more than 3.6 percent each on Friday.
At this point, the White House has not committed to a course of action.
“The president will examine the facts and make a determination that reflects the best interest of the United States,” White House spokesperson Natalie Strom said. “The U.S. solar manufacturing sector contributes to our energy security and economic prosperity.”
Trump’s basis for implementing restrictions on solar imports stems from a rarely-used provision in the Trade Act of 1974 known as Section 201. Under Section 201, the president has the authority to restrict imports that injure or threaten domestic industries.
Last week, Axiom analyst Gordon Johnson said Chinese solar stocks, such as JA Solar Holdings Co. (JASO) and JinkoSolar Holding Co. (JKS), could be hit hard by a potential tariff on imports. In August, Johnson described the lose-lose situation for these Chinese companies.
“We believe no matter what the outcome of the Section 201 trade case, Chinese solar module vendors and solar equipment providers are losers as they will either be temporarily shut out of the U.S. solar market , or see trends in the U.S. go back to how they were pre-trade case,” Johnson wrote.
While JinkoSolar and JA Solar didn’t participate in Friday’s big solar rally, the two stocks both traded slightly higher on the day.
In July, Trump told the Wall Street Journal the administration is “waiting till we get everything finished up between health care and taxes and maybe even infrastructure” before it addresses similar import concerns related to the U.S. steel industry.
The Trade Commission must now send recommendations to the president by November.
For now, Axiom has “sell” ratings on JinkoSolar and JA Solar.
Source:-Â https://money.usnews.com/investing/stock-market-news/articles/2017-09-25/trade-commission-ruling-boosts-us-solar-stocks
