Can Donald Trump stand prosperity? Fresh from a shutdown victory and with the U.S. economy on a roll, the president decided on Tuesday to kick off his long-promised war on imports — and American consumers. This isn't likely to go the way he imagines.
"Our action today helps to create jobs in America for Americans," he declared as he imposed tariffs on solar cells and washing machines. "You're going to have a lot of plants built in the United States that were thinking of coming, but they would never have come unless we did this."
The scary part is he really seems to believe this. And toward that end he imposed a new 30 percent tariff on crystalline silicon photovoltaic cells and solar modules to benefit two bankrupt companies, and a new 20 percent to 50 percent tariff on washing machines to benefit Whirlpool Corp. The tariffs will hurt many more companies and people, and that's before other countries retaliate.
The solar tariff is a response to a petition filed at the International Trade Commission by two U.S.-based manufacturers — Chinese-owned Suniva, which filed for bankruptcy last year, and German-owned SolarWorld Americas, whose parent company filed for bankruptcy last year. Under Section 201 of U.S. trade law, the companies don't need to show evidence of dumping or foreign subsidies. They merely have to show they were hurt by imports, which is to say by competition.
The two companies once employed some 3,200 Americans. But the wider solar industry, which depends on price-competitive cells as a basic component, supports some 260,000 U.S. jobs. The Wall Street Journal reported Tuesday that the Trump tariff may spur an unnamed panel manufacturer to invest in a new plant in Florida that will create 800 new jobs. But the Solar Energy Industries Association says it expects that the tariff will cost 23,000 U.S. jobs this year alone. It will also mean that billions of dollars of solar investments are likely to be postponed or canceled. Utility companies facing green-energy mandates from state governments will also suffer as it gets more costly to deliver solar-produced electricity.
Trump will also make doing the laundry great again, or at least more expensive, with a new 20 percent tariff on the first 1.2 million imported washing machines every year. Above that the tariff will go to 50 percent. Don't even think about assembling a washer with foreign parts, which get whacked with a 50 percent tariff above 50,000 imported units in the first year.
Goldman Sachs analyst Samuel Eisner wrote Tuesday that consumers can expect price increases for new machines of 8 percent to 20 percent depending on how much of the tariff the manufacturers decide to eat. Producers and workers are also losers. LG Electronics USA noted Tuesday that its new plant to make washers in Clarksville, Tenn., will be "the most advanced factory in the world" but warned that the tariff "hinders the ramp-up of the new plant and threatens many new U.S. jobs."
FROM AN EDITORIAL IN THE WALL STREET JOURNAL
