US President Donald Trump has imposed tariffs of 30 per cent on solar panels in the first year, which will gradually fall to half that figure in four years. Picture / AP
US President Donald Trump has imposed tariffs of 30 per cent on solar panels in the first year, which will gradually fall to half that figure in four years. Picture / AP
US President Donald Trump took action in two pending trade disputes today, imposing tariffs on imported solar panels and washing machines.
The twin actions represent Trump's first tariff orders and are his most consequential trade actions since the early days of his presidency when he withdrew from a Pacific trade deal and launched negotiations to overhaul the North American Free Trade Agreement.
The moves come in response to petitions from American manufacturers, who complained for years that rising imports were eating into their sales, and may signal the start of a wider administration offensive against US trading partners.
"There's a real chance that this opens the floodgates," said Chad Bown, a trade expert at the Peterson Institute for International Economics.
On solar panels, Trump imposed tariffs of 30 per cent in the first year, which will gradually fall to half that figure in four years. Those levies were less severe than Suniva and SolarWorld, the two companies that sought the government relief, had requested.
"We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States," said Juergen Stein, chief executive officer and president of SolarWorld Americas.
The Suniva-SolarWorld request for protection was opposed by much of the domestic US solar industry.
Tariffs that make solar panels more expensive, and thus discourage their use, will cause 23,000 installers, engineers and project managers to lose their jobs this year as billions of dollars in planned investment evaporates, according to the Solar Energy Industries Association.
Up to one third of the 260,000 Americans currently employed in the industry are at risk because of the tariffs, the group says.
"It boggles my mind that this president - any president, really - would voluntarily choose to damage one of the fastest-growing segments of our economy," said Tony Clifford, chief development officer for Standard Solar in Rockville, Maryland.
"This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries of an American taxpayer bailout."
Environmentalists also bemoaned the decision, which they described as a setback for the further development of renewable energy.
One industry body says tariffs that make solar panels more expensive will cause 23,000 installers, engineers and project managers to lose their jobs this year. Picture / Getty Images
Howard Crystal, a senior attorney with the Center for Biological Diversity said: "If Trump really wants to put America first, he should reduce our reliance on polluting energy sources that fuel climate change. Instead, this profoundly political move will make solar power more expensive for everyday Americans while propping up two failing, foreign-owned companies."
In the case of washing machines, Trump acted in response to a petition from Whirlpool, which complained about low-cost competition from rivals Samsung and LG.
The first 1.2 million washing machines imported each year will face a 20 per cent tariff, with additional imports facing a 50 per cent tax. Under today's announcement, parts also will be hit with a 50 per cent tariff.
The President's action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses.
"The President's action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses," US Trade Representative Robert Lighthizer said in announcing the moves.
In both cases, Trump acted under a provision of US trade law authorising global or "safeguard" tariffs, which had not been used since President George W. Bush levied tariffs on imported steel in 2002.
The safeguard process leaves the final decision on whether to impose trade remedies to the president rather than to the apolitical trade experts who normally adjudicate trade disputes.
Until now, American companies typically have shied from requesting safeguard help, fearing that presidents of both parties who favoured globalisation would reject their pleas, Bown said.
But Trump has changed that calculus.
"The signal is: if you have any credible claim, now's a good time to bring it," said one trade specialist, who asked not to be named because he was not authorised to speak to the press.
The announcement comes with the President scheduled to travel to Davos, Switzerland, later this week for the World Economic Forum.
He is scheduled to speak before the annual gathering of corporate and government leaders who are enthusiastic supporters of the globalised economy that Trump vows to refashion.
Both tariff decisions followed years of trade litigation, with frustrated US companies complaining of trade actions that amounted to "Whac-a-Mole" campaigns to remedy unfair foreign trade practices.
In the solar panel case, massive Chinese government subsidies and industrial planning were blamed for a surge in China's production of solar cells and modules, and the demise of up to 30 US solar panel makers.
China's share of global solar cell production rose from 7 per cent in 2005 to 61 per cent in 2012, according to the USTR.
In 2013, the Commerce Department imposed duties on South Korean washing machine makers Samsung and LG in response to Whirlpool's complaints that its rivals were selling their products in the US below the cost of production and were receiving government subsidies. In response, the South Koreans shifted production to China and escape the US tariffs.
In 2017, Commerce levied new tariffs on the washers arriving in the US from China only to see Samsung and LG shift again, this time to Thailand and Vietnam.
Anticipating further US action, both Samsung and LG announced plans last year to open new factories in the US. Samsung's facility in Newberry, South Carolina, already has begun initial production. LG's plant in Clarksville, Tennessee, is scheduled to begin turning out new washing machines in 2019.
"This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee," said Whirlpool Chairman Jeff Fettig. "This is a victory for American workers and consumers alike."
