President Trump took action in two pending trade disputes Monday, imposing tariffs on imported solar panels and washing machines.
The twin actions represent Trump’s first tariff orders and are his most consequential trade actions since the early days of his presidency when he withdrew from a Pacific trade deal and launched negotiations to overhaul the North American Free Trade Agreement.
The moves come in response to petitions from American manufacturers, who complained for years that rising imports were eating into their sales, and may signal the start of a wider administration offensive against U.S. trading partners.
“There’s a real chance that this opens the floodgates,” said Chad Bown, a trade expert at the Peterson Institute for International Economics.
On solar panels, Trump imposed tariffs of 30 percent in the first year, which will gradually fall to half that figure in four years. Those levies were less severe than requested by Suniva and SolarWorld, the two companies that sought the government relief.
“We are still reviewing these remedies, and are hopeful they will be enough to address the import surge and to rebuild solar manufacturing in the United States,” said Juergen Stein, chief executive officer and president of SolarWorld Americas Inc.
The Suniva-SolarWorld request for protection was opposed by much of the domestic U.S. solar industry. Tariffs make solar panels more expensive, and thus discourage their use, according to the Solar Energy Industries Association.
The trade association said the tariffs would cause 23,000 installers, engineers and project managers to lose their jobs this year as billions of dollars in planned investment evaporates. Up to one third of the 260,000 Americans currently employed in the industry are at risk because of the tariffs over the longer term, the group said.
“It boggles my mind that this president — any president, really — would voluntarily choose to damage one of the fastest-growing segments of our economy,” said Tony Clifford, chief development officer for Standard Solar in Rockville, Maryland. “This decision is misguided and denies the reality that bankrupt foreign companies will be the beneficiaries of an American taxpayer bailout.”
Environmentalists also bemoaned the decision, which they described as a setback for the further development of renewable energy.
Howard Crystal, a senior attorney with the Center for Biological Diversity, said: “If Trump really wants to put America first, he should reduce our reliance on polluting energy sources that fuel climate change. Instead, this profoundly political move will make solar power more expensive for everyday Americans while propping up two failing, foreign-owned companies.”
In the case of washing machines, Trump acted in response to a petition from Whirlpool, which complained about low-cost competition from rivals Samsung and LG.
The first 1.2 million washing machines imported each year will face a 20 percent tariff, with additional imports facing a 50 percent tax. Under Monday's announcement, parts also will be hit with a 50 percent tariff.
“The President’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses,” U.S. Trade Representative Robert E. Lighthizer said in announcing the moves.
In both cases, Trump acted under a provision of U.S. trade law authorizing global or “safeguard” tariffs, which had not been used since President George W. Bush levied tariffs on imported steel in 2002.
The safeguard process leaves the final decision on whether to impose trade remedies to the president rather than to the apolitical trade experts who normally adjudicate trade disputes.
Until now, American companies typically have shied away from requesting safeguard help, fearing that presidents of both parties who favored globalization would reject their pleas, said Bown.
But Trump has changed that calculus. “The signal is: If you have any credible claim, now’s a good time to bring it,” said an industry executive who spoke on the condition of anonymity because he was not authorized to speak publicly.
The announcement comes with the president scheduled to travel to Davos, Switzerland, later this week for the World Economic Forum.
He is scheduled to speak Friday before the annual gathering of corporate and government leaders who are enthusiastic supporters of the globalized economy that Trump vows to refashion.
Both tariff decisions followed years of trade litigation, with frustrated U.S. companies complaining of trade actions that amounted to “Whac-a-Mole” campaigns to remedy unfair foreign trade practices.
In the solar panel case, massive Chinese government subsidies and industrial planning were blamed for a surge in China’s production of solar cells and modules, and the demise of up to 30 U.S. solar panel makers. China’s share of global solar cell production rose from 7 percent in 2005 to 61 percent in 2012, according to the USTR.
In the dispute over washing machines, the Commerce Department imposed duties on South Korean washing machine makers Samsung and LG in 2013 in response to Whirlpool’s complaints that its rivals were receiving government subsidies and selling their products in the U.S. below the cost of production. In response, the South Koreans shifted production to China to escape the U.S. tariffs.
In 2017, Commerce levied new tariffs on the washing machines arriving in the U.S. from China only to see Samsung and LG shift again, this time to Thailand and Vietnam.
Anticipating further U.S. action, both Samsung and LG announced plans last year to open new factories in the U.S. Samsung’s facility in Newberry, South Carolina, already has begun initial production. LG’s plant in Clarksville, Tennessee, is scheduled to begin turning out new washing machines in 2019.
Samsung in a statement called the decision “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. "
Whirlpool said that the tariff move would benefit U.S. manufacturing workers.
“This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee,” the company's chairman Jeff M. Fettig said. “This is a victory for American workers and consumers alike.”