Trade War: Trump Fires Salvo Against China As US Imposes Steep Tariff On Chinese Solar Panels

The Donald Trump administration has decided to slap a whopping 30 per cent tariff on  solar cells and washing machines imported from China. The decision came in response to complaints from domestic United States (US) solar panel manufacturers that the Chinese government was massively subsidising production of solar panels and cells and leveraging the cost advantage to flood the US with cheaper models, making domestic manufacturing unviable.

The proposed tariffs will operate on a declining scale. In the first year, the tariff will amount to 30 per cent and will be decreased by 5 per cent each subsequent year.

The announcement was made by US Trade Representative Robert Lighthizer. In a statement, Lighthizer said President Trump had approved recommendations to impose safeguard tariffs on imported large residential washing machines and imported solar cells and modules.

He added that the “recommendations to the President based on consultations with the interagency Trade Policy Committee (TPC) in response to findings by the independent, bipartisan U.S. International Trade Commission (ITC) that increased foreign imports of washers and solar cells and modules are a substantial cause of serious injury to domestic manufacturers.”

The move has come under criticism from Solar Energy Industries Association (SEIA) – the national trade association for the US industry. They believe that this protectionist measure is likely to hurt the job market in the country. The $28 billion solar industry relies on foreign solar panels for 80 per cent of its supply.

The SEIA said the “decision effectively will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing, and it will result in the delay or cancellation of billions of dollars in solar investments”.

SEIA president and chief executive Abigail Ross Hopper added that “while tariffs in this case will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, they will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs.”

During the presidential campaign that eventually catapulted him to the White House, Trump harangued about how China was “killing” the US in trade.

Indian government too has been under pressure from domestic manufacturers to impose tariff on Chinese solar products. Citing “threat of serious injury” to the domestic industry, India’s Directorate General of Safeguards had recently recommended a 70 per cent safeguard duty on solar imports from China.