Within hours of Norwegian polysilicon manufacturer REC Silicon warning of the dire consequences its American operations could face in the event of a collapse in the U.S.-China trade talks, the Trump administration made good on its threat to raise the tariffs imposed on Chinese imports.
The U.S. president stirred up financial markets at the start of the week by tweeting that the 10% tariffs imposed on some $200 billion worth of Chinese imports would be raised to 25% if a deal was not hammered out with negotiators from Beijing by midnight last night.
REC Silicon yesterday published first-quarter results that showed falling revenue and rising losses and again reminded investors that it was paying the price for China’s decision to retaliate to U.S. trade measures by imposing tariffs on U.S.-made, solar-grade polysilicon imports.
The Norwegian-headquartered manufacturer revealed plans to further reduce polysilicon output from its Moses Lake facility in Washington state which had already suffered around 100 lay-offs in July. The next wind down is due to take place on Wednesday, said REC Silicon, adding: “Unless access to polysilicon markets in China is restored, the facility will be placed in a long term shutdown by June 30, 2019.”
Last night’s Trump-imposed deadline passed with no resolution to the trade talks, following months of negotiations, and means Chinese goods currently affected by the 10% tariff imposed by Washington will now face a 25% penalty.
However, early trading saw none of the negative market reaction which greeted the U.S. president’s outburst on social media on Sunday night and analysts feel the fact the raised tariffs will only apply to goods that left Chinese ports after midnight may signify talks are not quite dead yet.
With Chinese representatives reportedly due to resume negotiations in the U.S. today, the fact the 25% rate was not applied immediately from midnight effectively leaves a window of three weeks or so for a resolution to be found.
With the Chinese Ministry of Commerce reportedly responding to last night’s threat of raised tariffs by stating it would “have to make necessary countermeasures”, however, there appear to be nervy times ahead for REC Silicon’s remaining Moses Lake workforce.