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What: Shares of solar stocks were down across the board today, but JA Solar led the way by falling as much as 12%. Trina Solar , LDK Solar , and Suntech Power also fell by as much as 10% as European tariffs have put a cloud over the industry.
So what: The big news was yesterday's announcement that Europe will impliment an 11.8% tariff on solar products from China, and if a long-term deal isn't reached between these two regions, these tariffs will increase to between 37.3% and 67.9% on Aug. 6, depending on the company.
The news caused analysts at Goldman Sachs to downgrade shares of Trina Solar and JA Solar to sell.
Now what: Don't say you didn't see this coming. Two weeks ago, The Wall Street Journal reported that tariffs would hit Chinese solar manufacturers this month. I've been telling investors to avoid Chinese manufacturers, particularly those that are highly leveraged, in part because these companies are on the wrong side of the solar trade war. The U.S. and Europe are fighting back against massive subsidies given to the Chinese manufacturers, and this will only put more pressure on companies that can't make a profit.
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The article Why Chinese Solar Got Crushed Today originally appeared on Fool.com.
Fool contributor Travis Hoium and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.