Energy Wars: Tariff Trouble

From Robert Dillon, former communications director of the U.S. Senate Energy and Natural Resources Committee:

“Suniva and SolarWorld, two bankrupt solar cell manufactures, have exploited a rarely used provision in the 1974 Trade Act to convince the International Trade Commission that they are entitled to protection from international competition. Following a hearing at the end of September, ITC commissioners have now presented a range of proposed tariffs on imported solar panels and cells, all of which will distort the market and undermine competition. The decision now falls to President Trump who is expected to make a decision by January 26.

. . . The final and possibly the most depressing part of the case is that the firms seeking protection are not even American. Sunvia’s parent company is Chinese conglomerate Shunfeng International while SolarWorld is owned by a German-Qatari partnership.”

From Utility Dive, October 26, 2017:

“As the solar sector awaits a vote from the U.S. International Trade Commission (ITC) and a final decision by President Donald Trump in a high-profile solar trade case, a new report from GTM Research illustrates the potential harm tariffs could do to the rapidly growing industry. According to the report, utility-scale solar is the most vulnerable to any tariffs, quotas or floor price, and the potential harm to the domestic market could linger well after their expiration date in 2022.”

From Greentech Media, November 21, 2017:

“Acting on solar could have unintended consequences, however. Bloomberg reports that U.S. duties on imported solar equipment ‘would almost certainly’ prompt retaliation from China, South Korea and other nations at the World Trade Organization (WTO).

China could choose to impose tariffs on exports like Wisconsin cheese and Kentucky bourbon, ‘creating natural opponents to the tariffs in Mitch McConnell and Paul Ryan,’ said Clark Packard, a trade policy analyst for the Washington free-market think tank R Street Institute.

China has already imposed punitive import duties of up to 57 percent on certain U.S. polysilicon manufacturers in response to 2012 anti-dumping and countervailing duties.

In a recent note to investors, Credit Suisse analysts said they expect retaliation from the WTO and member countries opposed to the tariff, which could force President Trump to roll back any potential remedies. In the last Section 201 trade case filed against steel imports in 2001, tariffs were overturned within 21 months due to international pressure.”

From Ross Marchand, director of Policy for the Taxpayers Protection Alliance:

“While tariffs are a seductive way to keep America a step ahead of competitors, the tangled global economy means that any attempt to punish the competition will boomerang back to the United States. By rejecting USITC recommendations for higher tariffs, the president can cement recently-enacted tax reform and protect Americans from high costs and job destruction.”

My Opinion: I worked in the steel fabrication industry during the time of the 2001 tariffs on imported steel. Although American suppliers of steel benefited from the tariffs, the tariffs harmed American companies that needed steel for their products. In the end, American consumers were the losers.

If a tariff would harm more Americans than it would help, then the tariff shouldn’t be brought into existence.