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Biden Removes Some of Trump's Tariffs on Solar Panels, Good Idea?

In an effort to bring manufacturing back to the US, Trump placed huge tariffs on solar panels. Biden loosened them.
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Solar tariffs imposed by Trump, image Reuters via Wall Street Journal.

Solar tariffs imposed by Trump, image Reuters via Wall Street Journal.

Wishy-Washy Compromise

In a wishy-washy compromise likely to please no one, Biden Extends Trump’s Solar Tariffs, but Allows More Solar Cells to Enter Duty-Free

The Biden administration said Friday it would extend a set of tariffs on solar-energy imports for four years, but significantly reduce their scope by doubling the amount of solar cells that can enter the U.S. without facing any levies.

The tariffs apply to imports of solar cells and modules globally. About two-thirds of the familiar solar modules that go on rooftops and utility installations are made in China, and about 15% are manufactured by countries in Southeast Asia, often at Chinese-owned companies, according to the data from IHS Markit. U.S. producers make about 2%.

Pro-Tariff Position

“Gutting the safeguard this way makes it almost impossible to believe that we will ever produce solar cells, solar wafers, or polysilicon for solar production in this country ever again,” said Mamun Rashid, the president of San Jose, Calif.-based Auxin Solar Inc., one of the companies that had sought an extension of the tariffs. “This decision undermines our energy independence and our national security.”

In December, the International Trade Commission (ITC), a U.S. government body that advises Congress and the White House on tariff policy, recommended maintaining both the tariffs and the existing quota level of 2.5 gigawatts of solar cells. 

Anti-Tariff Position

The Solar Energy Industries Association, which represents companies that install and use solar panels, welcomed the administration’s actions even though it said it would have preferred to have the tariffs lifted entirely.

What Biden Did 

Biden administration officials say the U.S. would continue to allow bifacial solar panels—those that collect solar energy from both sides of the panel—to enter the U.S. without paying duties.

Ignoring the ITC, the Biden administration instead doubled the quota level to 5 gigawatts, allowing a significant chunk of imports to avoid the levies.

What Biden Should Have Done

This one is easy. Biden should have removed all of the tariffs.

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Despite the tariffs imposed by Trump, no U.S. factory makes the solar cells which are the key input to most solar panels.

Trump's tariffs raised costs, hindered doing anything about the environment, and cost a significant number of US jobs. 

You either want to do something about the environment or not. And the Tariffs cost the US jobs. Trump caused a loss in three ways. 

Fair Trade Clowns

The fair trade clowns want the floor. But Trump gave them a chance with huge tariffs and that still did not help, and it never will. Raise tariffs enough and the entire industry stalls over the price.

The fair trade idea is crazy for another reason. It implies China is giving the US too good a deal. In other words, China is subsidizing US consumers at it own expense. And we complain: No! I insist we pay more. 

The fair trade clowns would rather pay more for something to save or create a few hundred manufacturing jobs at the expense of thousands of installation jobs, trucking jobs, assembly jobs, etc. And in this case, the environment suffers over it as well, assuming you believe solar panels would make a difference. 

Regardless, Trump's tariffs were a total failure. Biden should remove all of them, not just the ones on solar panels.

This post originated at MishTalk.Com

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