It remains unclear exactly what components the potential tariff would apply to, but the prospect has rattled the industry.
According to the US Trade Representative (USTR), the new duty could be assessed on "wind-powered electric generating sets" – as well as on 1,300 other non-wind products imported from China.
These "sets" could mean assembled nacelles, or generators and inverters. The USTR would not elaborate.
The US’ three major OEMs, Vestas, Siemens Gamesa (SGRE), and GE assemble nacelles in the country. But if the tariff applies to generators and inverters, the impact could be wider in the US market.
Generators and inverters are sourced more widely, and the global supply chain for wind equipment is centred in China, said Make Consulting principal consultant, Aaron Barr.
Goldwind Americas, the US subsidiary of China-based Goldwind, imports its nacelles, generators and inverters from China. It is the only Chinese turbine manufacturer with a sizeable US foothold.
Components have not yet been shipped for RES Americas’ 160MW Heart of Texas project, according to Goldwind Americas CEO David Sale, leaving a question mark over the site. Goldwind is currently buying the project, whic is due online in 2019.
And in August 2017, Goldwind Americas announced a framework agreement to supply 60MW of turbines to One Energy. A firm order of 20 GW 87/1500 turbines was scheduled for immediate delivery.
Roughly 35-40% of a typical whole turbine cost is contained within the nacelle, according to Make.
Goldwind Americas’ new CEO David Sale said the impact of the tariffs was still unclear.
"The tariffs are not yet final so it is really too early to speculate. Goldwind is analysing the possible short- and long-term effects of the proposed tariffs on Chinese imported goods, in particular our components and others," he said.
Sale also believes any tariff would not hamper Goldwind’s growth in the US. "We believe there is ample opportunity in the increasingly competitive US wind market for Goldwind to succeed," he added.
Alex Morgan of Bloomberg New Energy Finance (BNEF) says: "We think the affect of this [tariff] will be minimal on the US sector overall."
The $53 million customs value is less than 1% of the estimated $6.1 billion spend on turbines installed in the US in 2017, BNEF added.
In 2017, just 34MW of the 7.3GW of wind capacity commissioned in the US were Chinese-made, Morgan said.
Make’s Barr added: "These tariffs may have an impact on [Goldwind America’s] competitive position, particularly as the ‘Big Three’ of GE, Vestas and SGRE are aggressively defending their market-share in the last years of PTC-backed construction."
A hearing on the recommended tariff will be held on 15 May at the US International Trade Commission in Washington DC.
According to a US Department of Commerce database, the Chinese wind equipment included on the USTR’s tariff list made up 25% of all US imports of "sets" in 2017, up from under 12% in 2015, and represented $53.3 million in terms of "customs value".
The $53 million figure likely squares with the volume of nacelles imported into the US from China in 2017, said Barr.
It would amount to 30-75 nacelles, depending upon the size. There is also some commercial sensitivity in declaring a component’s exact price.
The US president, an ardent protectionist, unveiled a 25% tariff on imported steel from most global markets. Make said it could raise the levelised cost of energy (LCOE) for a new wind project by 2-3%.
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