December 10, 2018

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Think Progress: Proposed tariffs could let Trump crush the solar industry

PMA mentioned in Think Progress article.

Friday, July 14, 2017

Trade officials are weighing new tariffs on imported solar cells that, if passed, would send shockwaves through the industry. By blocking the influx of cheap panels from overseas, tariffs would stunt demand for solar, dealing a critical blow to U.S. installers. By one estimate one-third of the solar workforce could lose their jobs.

We’ve actually run this experiment before. It didn’t turn out well.

In 2002, George W. Bush imposed heavy tariffs on steel imports. For the president, who was otherwise a champion of free trade, this was a politically motivated decision, intended shore up support among steelworkers in battleground states like Pennsylvania, Ohio, and West Virginia. It didn’t work as intended.

The European Union threatened to retaliate by imposing sanctions on imports from other swing states—including Tropicana orange juice from Florida and Harley Davidson motorcycles from Wisconsin. And the United Steelworkers of America didn’t take the bait. They endorsed Democrat Dick Gephardt for president.

It was bad politics and even worse policy. While the tariffs gave a fleeting boost to the domestic steel industry, they dealt a blow to U.S. businesses that depend on cheap steel. Steel prices more than doubled, and U.S. manufacturers started buying parts from overseas suppliers with access to cheap steel.

“It sounds great to protect an industry like steel — certainly, it’s critical to us — but you got to think about what happens downstream, because that’s equally critical,” said Bill Gaskin, former president of the Precision Metalforming Association. “If you’re buying parts for a toaster oven in China, you might as well make the toaster oven in China.”

Read more here.