Real Goods Solar, Inc. Shares Jumped 30% on Back of Trump’s New Tariff Announcement; Analysts Weigh in


It’s a very rewarding trading day for investors in Real Goods Solar, Inc. (NASDAQ:RGSE) with shares up nearly 30%, making the stock Wall Street’s bull of the day. The reason? In short, the Trump administration issued its long-awaited decision on solar panel import tariffs. The plan would impose tariffs of as much as 30 percent on solar equipment made abroad, a move that threatens to handicap a $28 billion industry that relies on parts made abroad for 80 percent of its supply. On back of the announcement, investors seem eager to buy shares of Real Goods Solar, which stands to gain in light of Trump’s new tariff.

Oppenheimer analyst Colin Rusch noted, “The safeguard tariff is currently expected to be incremental to the antidumping and countervailing duty (AC/CVD) measures currently imposed on Chinese imports and reciprocal duties on US polysilicon, although the US Trade Representative intends to open negotiations to determine a resolution that would benefit the domestic industry.” Furthermore, “Our checks suggest limited clarity on how exemptions will be made for the 2.5GW of imported cell exemption. While the language in the announcement reads that it would be on a first come, first serve basis, we expect a more nuanced implementation that could favor US-domiciled entities.”

B. Riley FBR analyst Carter Driscoll added, “Both South Korea and China have denounced the tariffs, indicating the countries will defend their national interests through the World Trade Organization (WTO). Previous U.S. safeguards cases have fallen to WTO challenges, largely because the WTO includes an additional requirement that imports were caused by “unforeseen developments,” which is not a part of U.S. law or the ITC’s requirements for finding harm. In an apparent effort to preempt this, the USTR requested a supplemental report detailing the “unforeseen developments” that led domestic solar manufactures to be injured by imports. Nevertheless, the possibility that the tariff regime could be cut short by a year or two remains. We see comparatively little risk to domestic legal challenges, given the broad discretion of presidential authority inherit in Section 201 trade cases.”

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