US introduces tariffs on solar panels and washing machines

Posted on 24 Jan 2018 by Michael Cruickshank

The United States has this week announced that it will begin charging import tariffs on a number foreign-manufactured high-value products.

Solar panels imported into the US will now face large tariffs. Image courtesy of Wikipedia.
Solar panels imported into the US will now face large tariffs. Image courtesy of Wikipedia.

Specifically, the Trump Administration has announced that the tariffs will apply to solar panels and washing machines manufactured outside of the US.

The decision to implement this tariff through the “Section 201” safeguard clause came in the wake of findings by the US International Trade Commission that these imported products were “a substantial cause of serious injury to domestic manufacturers”.

Solar panels would be hit with a 30% tariff in the first year, which would decline to 15% after four years. As well the country would be allowed to import up to 2.5GW of unassembled solar panels tariff-free per year.

As for the washing machines, these would face a 20% tariff on the first 1.2m machines imported in the first year and a 50% tariff on any further machines in that year. These numbers would similarly decline to 16% and 40% respectively after 3 years.

US protectionism deepens

This is the latest overtly protectionist measure taken by the US since the beginning of the Trump Administration, which appears to have abandoned free trade as a guiding principle of the country.

Trump believes that through imposing these tariffs, his government can encourage foreign companies to instead manufacture these products in America, and thus create jobs – a major campaign promise.

“Our action today helps to create jobs in America for Americans. It will provide a strong incentive for LG and Samsung to follow through on their recent promises to build major manufacturing plants for washing machines right here in the United States,” President Trump remarked.

“We support a resolution that is in the interest of American workers and, also, the American consumer. We’re going to benefit our consumers, and we’re going to create a lot of jobs.”

Companies affected by these tariffs though have hit back at Trump, pointing out that these tariffs will likely cause significant price rises for consumers.

“Today’s announcement is a great loss for American consumers and workers. This tariff is a tax on every consumer who wants to buy a washing machine. Everyone will pay more, with fewer choices,” said Samsung in a press statement.

As well representatives of the solar industry have also criticised the move, saying that it would ironically lead to job losses in the US, as many people are employed in manufacturing the parts for cheaper imported panels.