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.
Please consider Manufacturers Fight Over New Tariffs’ Effect on U.S. Jobs.
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?
- US consumers who buy the panels, allegedly subsidized by China.
- US companies that install the panels.
- US shipping and trucking companies that deliver the product.
- Local fast food restaurants where the installers eat.
- Gasoline stations where the truckers and installers fill their tanks.
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