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.
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
Please Subscribe!
Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
You can’t
complain about the deficit in trade goods being too high and complain about tariffs
being too high at the same time. They are two sides of the same coin. Trade is
not and, has never been and never will be a level field nor has high tariffs
ever been a barrier to high economic growth. Free trade is a philosophy just
like Monetarism and Marxism are and blind obedience to the idea instead
of reality has always lead to disaster. No I do not think that all tariffs are
bad and they should be used when merited.