Manufacture This

The blog of the Alliance for American Manufacturing

Decision on tariff levels falls to president after ITC recommends action in two industries.

We got a new year going! Happy New Year. The president is back and back at it. Seems really refreshed. We’ve already outlined a bunch of stuff we hope to see the White House tackle in 2018, including meaningful action on the deluge of steel and aluminum imports. Hey, the Republicans got their tax bill across the finish line, and the administration said that’s what the hold-up was! Time for action on steel. Workers are waiting.

In the meantime, though, there are other trade kettles boiling, like possible (separate) tariffs on imported washing machines and solar panels.

Here’s what's up: Manufacturers in each industry – Whirlpool for washers, and Suniva and SolarWorld for solar panel producers – brought cases to the U.S. International Trade Commission (ITC), and had to show evidence they had been injured by unfairly traded imports.  

The ITC, according to the Wall Street Journal, agreed with the plaintiffs in both cases, and sent its recommendations to the White House – where it’s up to the president to decide what to do next. Apply tariffs a little? A lot? Not at all? He’s got a lot of leeway.

Whether he does or not, imports of washers and solar panels have skyrocketed. Notes the Journal:

Trade data offer a limited window into companies’ export decisions, which can be influenced by seasonality, demand and trade. But Panjiva trade analyst Christopher Rogers said manufacturers expecting new trade barriers often boost shipments. Their attitude, he said, is: “Let’s get while the getting is good.”

The free-trade-at-all-cost nerds who oppose raising tariffs say those costs will just get passed onto consumers, but – specifically in the case of solar imports – it's hard to argue with the fact the Chinese government subsidizes the heck out of this industry (just like it does to sectors like steel) and it plans to do the same in many other sectors.

Not exactly open market competition! We’ll be watching closely to see what President Trump does regarding these tariff decisions.