American manufacturers say cheap solar-power materials from China and other countries have undercut them and want stiff financial penalties to level the playing field — but industry leaders fear the booming sector could collapse if President Trump chooses to implement tariffs.

Mr. Trump is considering such a move and is expected to make a decision by next week in response to a trade case brought by U.S. manufacturers. The decision looms as the White House pursues a broader policy of shrinking trade deficits and cracking down on nations such as China that dump low-cost products into America.

The U.S. companies that brought the trade case, Suniva and SolarWorld, argued that the lack of tariffs on foreign products made it virtually impossible for them to compete. The U.S. International Trade Commission agreed late last year, finding that foreign solar materials are hurting domestic companies.

But those cheap overseas products have helped fuel massive growth in the solar industry in recent years, with utilities making large-scale investments in solar energy and growing numbers of businesses and American families installing panels on their rooftops. The price of solar panels has dropped by more than 70 percent since 2010, and the sector’s job growth over the past decade is rivaled by few, if any, other areas of the economy.

Now that solar occupies a large share of energy markets across the country, industry leaders say, government intervention in the form of tariffs would be disastrous.

“If government puts its hand on the scale, they’re going to raise energy prices,” said Abigail Ross Hopper, CEO of the Solar Energy Industries Association, the sector’s leading trade group and a strong voice against tariffs.

Ms. Hopper argues that the price of solar power in the U.S. could double if tariffs are put into place. As a result, she said, tens of thousands of jobs in the sector could be lost.

Analysts say the president’s looming decision carries even greater dangers for the industry. Most notably, the implementation of tariffs and the likely price spikes that would follow could shatter the argument, often used by industry leaders, environmentalists and others, that renewable energy in the long run will be cheaper than fossil fuels.

“We’ve been talking about this trade case since late April, and the industry has been very focused on it since then. One of the reasons is that this case has directly challenged a key assumption of the renewable energy industry — and that is that cost is always going to come down,” said Jeff Berman, director of emissions and clean energy analytics at S&P Global Platts. “Over the last eight months, they’ve needed to come to terms that that might not always be the case.”

The tariffs, which would apply to imported solar cells and modules, would be in effect for four years after they are implemented.

The recommendations from the International Trade Commission included tariffs as high as 35 percent, and they would apply to solar panel parts imported from around the world, not just China. Mr. Trump must decide by Jan. 27 whether to adopt the commission’s recommendations, come up with his own compromise plan or reject tariffs entirely.

The issue has split lawmakers on Capitol Hill. Senators from states with massive solar power growth have urged the president to resist tariffs for the sake of fostering continued expansion in a vibrant sector of the economy.

On the other side of the debate, lawmakers from states that are home to domestic solar manufacturers — such as those from Oregon, where SolarWorld’s American division has headquarters — have pushed Mr. Trump to impose tariffs.

“All forecasts indicate that U.S. demand for solar energy will continue to grow — the question is whether American-made products will help supply that growing demand,” reads a letter sent to the president last month from a bipartisan group of 11 lawmakers, including Sens. Jeff Merkley and Ron Wyden, Oregon Democrats.

For the White House, the matter could be a politically perfect opportunity to strike back against China and cut into huge trade deficits that have continued throughout the first year of Mr. Trump’s presidency.

On a phone call with Chinese President Xi Jinping on Monday evening, Mr. Trump “expressed disappointment that the United States’ trade deficit with China has continued to grow,” the White House said. The deficit grew by about 7 percent this year.

While Ms. Hopper points out that China supplied less than 10 percent of all U.S. solar imports last year, the broader trade issue between the two nations could play into Mr. Trump’s decision.

“President Trump has made trade generally such a key part of his agenda, and you have these solar companies saying ‘Look at what all of these foreign companies are doing,’ and you have a president who by certain reports has said, ‘I want tariffs, give me tariffs,’ and here’s a way for him to do that,” Mr. Berman said. “Whether President Trump cares about solar, implementing tariffs accomplishes a lot of his other priorities.”

Indeed, Mr. Trump is feeling pressure from groups that say the solar tariff case gives the president an opening to make good on his campaign promises to get tough with China and other nations wreaking havoc on American manufacturers.

“This case provides an opportunity for your administration to neutralize foreign trade and economic strategies targeting the United States solar panel manufacturing industry,” the nonprofit Coalition for a Prosperous America wrote in a letter to Mr. Trump last week.

Ms. Hopper said no one in the administration has disputed the fact that the industry would feel immediate and significant pain as a result of tariffs, but that fact could take a back seat as the president makes his final determination.

“I think our industry has done a really good job of making it very clear that high tariffs will result in significant job loss,” she said. “I have not really heard any administration official doubt that. There are other forces at play and other politics at play.”

• Dave Boyer contributed to this report.

Sign up for Daily Newsletters Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.