Solar Companies Behind Tariff Increases are Foreign-Owned

Trump raised tariffs on solar panels pledging "America First." The two companies that petitioned Trump are foreign owned

Yesterday, Trump announced tariffs on solar panels and washing machines as part of his "America First" program.

The solar industry itself says the tariffs will cost about 23,000 jobs.

Here's the ultimate irony: The bankrupt companies petitioning for the solar panel tariffs are foreign-owned.

President Donald Trump’s move to slap tariffs on imported solar panels and washing machines is meant to revive domestic industries struggling to fend off foreign competition. But in the affected sectors, there is little agreement on whether it will actually jump-start U.S. manufacturing and jobs.

Solar-industry leaders said tariffs will slow growth in solar-panel installations and the jobs they create, which are more plentiful than in solar-cell manufacturing, a relatively small industry in the U.S.

South Korean and U.S. washing-machine makers meanwhile tussled over whether the trade restrictions will help or hurt domestic jobs, with foreign manufacturers arguing that they will hamstring their efforts to build more appliances at new plants in America.

But the most immediate impact of Mr. Trump opening the door to tariffs may be spurring retaliation by trade partners, as well as inviting more U.S. companies to seek help, said Chad P. Bown, a senior fellow at the Peterson Institute for International Economics in Washington. That, in turn, could trigger additional trade skirmishes and fallout for U.S. workers and consumers.

The Solar Energy Industries Association forecast that the trade protections will cost 23,000 U.S. jobs this year, and cause billions of dollars in solar investments to be delayed or canceled.

Critics noted that the two companies that petitioned the federal government for relief in the form of import tariffs were imperfect beneficiaries for an “America First” trade policy, as both are foreign-owned: SolarWorld Americas Inc. by a German company, Suniva Inc. in part by a Chinese manufacturer.

New Phase in "America First"

Let's recap what I said yesterday in New Phase in "America First".

Who Wins from Cheap Solar Panels?

  1. US consumers who buy the panels, allegedly subsidized by China.
  2. US companies that install the panels.
  3. US shipping and trucking companies that deliver the product.
  4. Local fast food restaurants where the installers eat.
  5. Gasoline stations where the truckers and installers fill their tanks.
  6. Environment.

Trade War Repercussions

Tariffs may save a handful of jobs at bankrupt US companies that cannot compete globally, but it will be at the expense of all six of the above.

The same applies in a similar fashion to TVs, underwear, and washing machines.

China may retaliate by canceling orders from Boeing or reducing soybeans imports from US farmers.

It is not going to take much to prick various global economic bubbles. A trade war with China could do it.

"America First" Cost/Benefit Analysis

  • We save (using the word loosely) 100 or so jobs in the solar manufacturing industry.
  • The cost is 23,000 installation and other jobs.
  • The manufacturing beneficiaries are foreign owned

True Source of Trade Imbalance

Few know the true source of the US trade imbalance with China and Mexico. I discuss the reasons here: Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?.

Mike "Mish" Shedlock

Comments
No. 1-21
DBG8489
DBG8489

@Sechel

Not sure whether or not you've been paying attention but there are at least two separate major national organizations that lobby on behalf of their members - the Democrat and Republican parties. There are others, but there is some disagreement as to how effective they are.

And consumers spending their money is a very effective lobbying tool as well. Just ask the victims of the many boycotts that have been enabled by widespread consumer revolt.

And I notice you didn't address the source of the problem...which if fixed would eliminate not only lobbyists, but it would also eliminate the ability for politicians to get rich in office...or immediately upon retirement...

Sechel
Sechel

@dbg8489 the distinction is that corporations lobby with one voice or a few voices, consumers are fragmented and not represented by associations for the most part . as an individual i can't lobby unless i'm very rich, otherwise i would be forced to somehow organize with other like minded individuals a daunting task, gm can easily lobby on its own or hook up with ford and chrysler and then lobby. this is another version of why workers find it necessary to form unions, to level the playing field

DBG8489
DBG8489

@Sechel

Consumers lobby with money and votes. Which would work except for one little thing...the source of the problem.

In most cases* lobbying is a direct result of a regulation - Government enacts legislation that results in regulation and regulators. Company A needs a loophole, so they enlist lobbyists. Lobbyists use hookers and blow on politicians/regulators which may result in a change or loophole. When a change or loophole is enacted and it may intrude on Company B's market. So Company B hires lobbyists...

Hookers/blow/change/repeat - which makes politicians, regulators, lobbyists, and companies rich while the rest of us watch.

And I'm not even going over the unintended consequences that may result as a change in regulations.

So is the source of the problem the lobbyists, the politicians, or the regulators?

Or is it the federal government overstepping it's bounds and creating laws to govern things it has no authority to govern?

Without the overstepping and excessive laws, there would be no money in being a politician, lobbyist, or regulator.

But instead of actually doing what is necessary and reigning in a government out of control, we think adding more regulations - to limit lobbying or whatever - is the solution.

Please note that in this* case, the federal government specifically has constitutional authority to regulate trade with other nations. The tariffs are a stupid idea but at least they have the authority.

Sechel
Sechel

the problem is companies can effectively lobby. consumers do not

GregNortonFL
GregNortonFL

SolarWorld (one of two plaintiffs in tariff case) is Oregon's Solyndra. Failure of the plant wouldn't just be a problem for the management and ridculously overpaid workers, but the State of Oregon as well.