Economy

New Trump Tax on Solar Imports Could Cost 23,000 Jobs

JM Ashby
Written by JM Ashby

In a news dump very late last night, the Trump regime announced that it will impose a 30 percent tax on solar panel imports from Europe and Asia.

In would I would call a small preview of what could happen if Trump eventually withdraws from the North American Free Trade Agreement (NAFTA), the move is expected to cost up to 23,000 jobs and increase prices for consumers.

The U.S.-based Solar Energy Industries Association said the decision could cause the loss of around 23,000 U.S. jobs this year, and result in the delay or cancellation of billions of dollars in solar investments.

The U.S. government argued that its domestic manufacturers could not compete with what it said were artificially lower-priced Asian panels. [...]

China’s Ministry of Commerce on Tuesday said the decision damaged the global trade environment, and the Ministry of Industry and Information Technology said Chinese solar companies were likely to curb overseas expansion.

“China’s solar industry has been growing at a fast pace in recent years, making itself a target of protectionism in some countries,” it said.

South Korea said it would “actively respond to U.S. trade protectionism”, including exercising its rights under the World Trade Organization.

If it feels like the Trump regime is the only party forcefully arguing that domestic manufacturers can't compete with panels produced overseas, that's because they are. The solar industry did not ask for these tariffs. Imports from overseas are cheaper because they're abundant. It's supply and demand. Strong supply from overseas has made it cheaper to install solar panels in the U.S. and created tens of thousands of jobs in the installation business.

From a more meta perspective, the Trump regime's actions are incoherent. Trump's cabinet has taken steps to roll back environmental regulations, clean power plans, and sustainability initiatives that will weaken producers of solar panels in the United States while also waging war against imports in the name of bolstering domestic production. Even after accounting for possible tariffs, Trump's policies are probably going to lead to more imports, not less.

Meanwhile, the solar industry was not the only industry hit last night.

In their midnight news dump, the Trump regime also announced that it will place a tax on imported washing machines. Bloomberg reports that producers plan to evade Trump's tax through a combination of raising prices on American consumers and shifting their flow of production.

Targeted companies like South Korea-based LG Electronics Inc. and China’s Midea Group Co. can get around the import duty, of as much as 50 percent, by raising prices or re-routing production to countries exempt from the new taxes. Several Asian appliance makers, such as Samsung Electronics Co. and China’s Qingdao Haier Co., have U.S. factories that could help ease the conflict as companies ramp up production there.

“The negative effect on the industry outside the U.S. is likely to be small, as companies have various strategies in place to deal with this scenario,” said Yuanta Securities Co. analyst Juliette Liu in Taipei. “They can pass on cost increases to consumers or ship the parts into the U.S. or neighboring countries for final assembly to avoid the tariffs.”

Whirlpool announced last night that it would add a whopping 200 jobs following the news, which is about as many people as are employed at a single large grocery superstore.

  • muselet

    The WTO will smack the administration down, hard, and rightly so.

    Donald Trump will then threaten to withdraw from the WTO.

    If he goes through with it, the rest of the world will dramatically reduce trade with the US.

    So much winning.

    –alopecia

  • ninjaf

    The only people who lobbied for this tariff on solar panels are two US manufacturers who are going bankrupt. So, once again, this administration can’t see the big picture enough to follow macro economic strategies. Hey, Cadet Bone Spur…this is not your family business where you pick a supplier you like and give them your business.

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