07.23.18

Citing the Devastating Impact of Polysilicon Tariffs on Moses Lake Jobs & Economy, Senators Cantwell, Murray and Representative Newhouse Urge President Trump to Resolve Growing Trade Dispute with China

In a new bipartisan letter, WA & MT members of Senate and House call attention to dire effects of Chinese tariffs on polysilicon materials

Washington, D.C. – Today, U.S. Senators Maria Cantwell (D-WA) and Patty Murray (D-WA) and U.S. Representative Dan Newhouse (R-WA, 4th District) shined a spotlight on the devastating impact of Chinese tariffs on polysilicon materials, a move that has negatively affected polysilicon manufacturers in Moses Lake, WA, and hurt its local economy and job market. In 2014, China placed tariffs on polysilicon materials, a key component in the production of semiconductors, solar panels and other technology products, in retaliation for U.S. tariffs previously imposed on energy products from China. The move effectively locked U.S. polysilicon manufacturers, who rely on Chinese imports of polysilicon materials, out of the market – including REC Silicon, which was recently forced to lay off approximately 40 percent of the workforce, or nearly 100 employees, at its Moses Lake, WA plant. In all, REC Silicon has laid off more than 300 employees at its Moses Lake plant since the tariffs went into effect.

In a bipartisan letter to President Trump, the members underscored the importance of the U.S. polysilicon industry to local economies across the country, including in Moses Lake, and urged President Trump to resolve the United States’ deepening trade war with China that is negatively impacting U.S. workers, businesses, and communities. The members have previously raised concerns about how President Trump’s accelerating trade dispute with China and other U.S. trading partners is having a negative impact on Washington state’s economy, including agriculture products, airplane exports, and more.

“On July 2nd, REC announced the layoff of nearly 40 percent of its workforce in Moses Lake, amounting to approximately 95 employees across the company..[t]his is the most recent round of several layoffs at REC as a direct consequence of China’s unfair trade retaliation, but this is the most severe to date, and we fear further job losses may follow in the near term,” said the members in the letter. “Job loss to this degree hits particularly hard in rural communities like Moses Lake, where the unemployment rate stands at 6.2 percent, almost double the national average…[i]n addition to further layoffs, China’s devastating trade retaliation is forcing REC to consider a complete shutdown of its operations in Washington State within the coming months. This will result in the loss of the remaining 200 highly skilled jobs in Moses Lake, and will jeopardize the United States’ control of the most energy-efficient technology used globally to create polysilicon. “

The letter continued: “Without a permanent resolution, a series of harmful economic effects will continue to domino in our states and the United States will suffer severe and possibly irreversible setbacks in its ability to manufacture semiconductors, solar panels, and other new technology products without reliance on China.”

In addition to Senators Cantwell and Murray and Representative Newhouse, the bipartisan letter was also signed by the members of Montana’s congressional delegations, including U.S. Senators Jon Tester (D-MT) and Steve Daines (R-MT), and U.S. Representative Greg Gianforte (R-MT).

The full text of the letter can be found HERE and below.

July 23rd, 2018

Dear Mr. President:

As Members of Congress representing Washington State and Montana, we urgently seek your assistance to meaningfully engage in discussions with China toward a positive resolution around the trade disputes and retaliatory duties imposed by China that are negatively impacting the U.S. polysilicon manufacturing sector.  Developing a path to resolution away from the current standstill will effectively mean saving hundreds of jobs this industry supports in our home states.

Polysilicon is a high-tech, advanced raw material, and is the critical ingredient to the production of semiconductors and solar panels. Polysilicon is expected to  be the foundation of new strategic products that are likely to dominant future growth in certain technologies, like silicon based batteries and electric vehicles. Unfortunately, the economic impact of Chinese anti-dumping and countervailing duties that were imposed on the U.S. polysilicon industry in retaliation for U.S. duties on Chinese solar products in 2014 has devastated this once strong U.S. industry across the country.

The direct effect of this unfair Chinese trade enforcement action has had particularly dire effects for REC Silicon (REC), a U.S. manufacturer of polysilicon with major operations in Moses Lake, Washington and Butte, Montana. On July 2nd, REC announced the layoff of nearly 40 percent of its workforce in Moses Lake, amounting to approximately 95 employees across the company. At REC’s manufacturing facility in Butte, many workers have also lost their jobs. This is the most recent round of several layoffs at REC as a direct consequence of China’s unfair trade retaliation, but this is the most severe to date, and we fear further job losses may follow in the near term. Job loss to this degree hits particularly hard in rural communities like Moses Lake, where the unemployment rate stands at 6.2 percent, almost double the national average. This is especially devastating when you consider that at its peak in 2011, REC generated $1 billion in annual revenues from its manufacturing operations across the United States and accounted for approximately 900 high-paying jobs.

In addition to further layoffs, China’s devastating trade retaliation is forcing REC to consider a complete shutdown of its operations in Washington State within the coming months. This will result in the loss of the remaining 200 highly skilled jobs in Moses Lake, and will jeopardize the United States’ control of the most energy-efficient technology used globally to create polysilicon.  We also understand that this dispute is putting potentially undue pressure on and further threatening jobs at the two other remaining U.S. polysilicon producers affected by this dispute.  Without a permanent resolution, a series of harmful economic effects will continue to domino in our states and the United States will suffer severe and possibly irreversible setbacks in its ability to manufacture semiconductors, solar panels, and other new technology products without reliance on China. 

As such, we request your immediate attention to this issue by elevating this dispute in the ongoing conversations between your Administration and Chinese officials. It is imperative the U.S. direct these talks toward a positive and permanent resolution for U.S. polysilicon companies, including REC, while persuading China to play fair.  Doing so would preserve hundreds of U.S. jobs and American technological leadership in polysilicon manufacturing.

Cc:

The Honorable Robert Lighthizer, United States Trade Representative

The Honorable Wilbur Ross, Secretary of Commerce

The Honorable Steven Mnuchin, Secretary of the Treasury

The Honorable Terry Branstad, Ambassador of the United States to China

The Honorable Larry Kudlow, Assistant to the President for Economic Policy

The Honorable Peter Navarro, Assistant to the President for Trade and Manufacturing Policy

The Honorable Everett Eissenstat, Deputy Assistant to the President for International Economic Affairs

Sincerely,

###