US slaps 'America First' tariffs on washing machines and solar panels
23 January 2018
The US has approved controversial tariffs on imported washing machines and solar panels. The move is in line with President Donald Trump's "America First" trade policy, which aims to protect local manufacturers from foreign competition. A spokesman said the administration would "always defend American workers, farmers, ranchers and businessmen". But China and South Korea, whose manufacturers will be most heavily affected, criticised the move. US officials said more trade enforcement actions would follow. Mr Trump has talked about taking the action ever since coming to office. In his inauguration speech a year ago he promised to protect US borders from other countries "making our products, stealing our companies and destroying our jobs". The actions are being seen as the president's most significant trade moves since his decision to pull the US out of the Trans-Pacific Partnership deal (TPP) and renegotiate the North American Free Trade Agreement (Nafta). The tougher policy was approved by President Trump after the US International Trade Commission (ITC) found local manufacturers were being hurt by cheaper imports. Manufacturing companies - Whirlpool, a US-based maker of washing machines, and the solar firms Suniva and Solar World Americas - had complained to the ITC and it found in their favour. The tariffs set on solar panels were lower than domestic US producers had hoped for, but the duties on washing machines and parts were steeper than expected - adding as much as 50% in some cases, according to US documents. The first 1.2 million imported large residential washing machines in the first year will have a 20% tariff imposed on them, while there will be a 50% tariff on machines above that number. By the third year, these will drop to 16% and 40% respectively. Figures suggest that in 2010, 1.6 million washing machines were imported to the US. Meanwhile, the tariff increase on imported solar cells and modules in the first year will be 30%, falling to 15% by the fourth year, although 2.5 gigawatts (GW) of imported cells - enough for about 11.5 million panels - will be allowed in tariff-free annually. The ITC said that China had been selling "artificially low-priced" solar components in the US, assisted by state subsidies. Taylor Kate Brown, BBC News, Washington The Trump administration has imposed these tariffs as part of a larger promise to protect American manufacturing - including the solar industry firms that brought the original complaint to the trade commission. But what the "solar industry" means in this context is complicated. The tariffs were opposed by America's largest solar industry group - the Solar Energy Industries Association (SEIA).  SEIA said Suniva and Solarworld had used the complaint to cover for bad business practices - and pointed out the two companies are actually foreign-owned even though the produce panels in the US. SEIA's position was also driven by the fact the group represents thousands of solar installers - an industry that's seen explosive growth, driven in part because of the dropping cost of panels. Firms that specialise in larger solar "farms" that sell their energy to US utilities are particularly worried about the decision, as they compete directly with coal, natural gas and wind producers. Ironically, the decision could mean more competition for Suniva and Solarworld, as several foreign firms may be interested in moving production to the US. US appliance maker Whirlpool, which for years has sought protection against cheaper imports from South Korea and Mexico, welcomed the move. "This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee," chairman Jeff Fettig said in a statement. Shares in Whirlpool rose 2.5% on the news, and it immediately announced it would employ 200 more people. Shares in US solar panel manufacturers also went up. Environmentalists argue that making solar panels more expensive risks holding back the development of renewable energy in the country. China and South Korea have reacted angrily to the news. South Korea said it would complain to the World Trade Organization (WTO), calling the tariffs "excessive" and "regrettable". Its manufacturers, including Samsung and LG, compete in the washing machine market with US firms such as Whirlpool. Samsung called the tariffs "a tax on every consumer who wants to buy a washing machine". Meanwhile China, the world's biggest solar panel manufacturer, said the move would further damage the global trade environment. China is the US's biggest trading partner and government spokesman Wang Hejun said that Beijing expressed "strong dissatisfaction" with the plans. He warned that "together with other WTO members, China will resolutely defend its legitimate interests" adding that the plans "not only aroused the concern of many trading partners but was also strongly opposed by many local governments and downstream enterprises in the US".
The tougher policy was approved by President Trump after the US International Trade Commission (ITC) found local manufacturers were being hurt by cheaper imports. Manufacturing companies - Whirlpool, a US-based maker of washing machines, and the solar firms Suniva and Solar World Americas - had complained to the ITC and it found in their favour. The tariffs set on solar panels were lower than domestic US producers had hoped for, but the duties on washing machines and parts were steeper than expected - adding as much as 50% in some cases, according to US documents.
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Why have the tariffs been imposed?
The first 1.2 million imported large residential washing machines in the first year will have a 20% tariff imposed on them, while there will be a 50% tariff on machines above that number. By the third year, these will drop to 16% and 40% respectively. Figures suggest that in 2010, 1.6 million washing machines were imported to the US. Meanwhile, the tariff increase on imported solar cells and modules in the first year will be 30%, falling to 15% by the fourth year, although 2.5 gigawatts (GW) of imported cells - enough for about 11.5 million panels - will be allowed in tariff-free annually. The ITC said that China had been selling "artificially low-priced" solar components in the US, assisted by state subsidies.
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How will the tariffs work?
US appliance maker Whirlpool, which for years has sought protection against cheaper imports from South Korea and Mexico, welcomed the move. "This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee," chairman Jeff Fettig said in a statement. Shares in Whirlpool rose 2.5% on the news, and it immediately announced it would employ 200 more people. Shares in US solar panel manufacturers also went up. Environmentalists argue that making solar panels more expensive risks holding back the development of renewable energy in the country. China and South Korea have reacted angrily to the news. South Korea said it would complain to the World Trade Organization (WTO), calling the tariffs "excessive" and "regrettable". Its manufacturers, including Samsung and LG, compete in the washing machine market with US firms such as Whirlpool. Samsung called the tariffs "a tax on every consumer who wants to buy a washing machine". Meanwhile China, the world's biggest solar panel manufacturer, said the move would further damage the global trade environment. China is the US's biggest trading partner and government spokesman Wang Hejun said that Beijing expressed "strong dissatisfaction" with the plans. He warned that "together with other WTO members, China will resolutely defend its legitimate interests" adding that the plans "not only aroused the concern of many trading partners but was also strongly opposed by many local governments and downstream enterprises in the US".
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What has the reaction been?