PRESIDENT TRUMP has what might seem like an irresistible opportunity for a populist climate-change denier: to crack down on imports and harm the effort to combat climate change all at once. Yet even the briefest of looks shows that slapping tariffs on imported solar cells, as he has been urged to do, would harm far more Americans than it could possibly help. In other words, this is a precedent-setting test of whether reality can beat rhetoric in the White House. The implications are vast for the future of the internationally integrated U.S. economy.
The United States has seen a boom in solar power over the past several years, as the cost of the once-pricey energy source has plummeted to a paltry 6 cents per kilowatt-hour. A big part of the story is the advent of highly efficient solar cell manufacturing in China and elsewhere, which has driven down the cost for essential solar parts. Notably, solar cell imports have not minimized employment in the solar industry, which now supports some quarter-million jobs, according to the Solar Energy Industries Association. In fact, the industry group points out, imports supply a domestic manufacturing sector based on assembling solar racks and specialized equipment. The group warns that a sharp rise in solar cell costs would threaten thousands of jobs, as well as raise prices for the increasing number of consumers who rely on solar energy, in order to protect a fraction of the jobs such a move would risk.
Yet higher prices are exactly what Suniva and SolarWorld Americas, two struggling solar cell manufacturers, are asking the Trump administration to mandate. They filed a complaint with the U.S. International Trade Commission (ITC) asking for stiff tariffs on solar cell imports under an old and backward section of the country's trade law, which has been dormant for nearly two decades. The companies needed to show only that a surge in imports harmed them. Then, last Tuesday, the ITC recommended tariffs. Now, the president will get final say.
Mr. Trump clearly believes that the government should restrict Americans’ freedom to trade. But agreeing with the complainers in this case would obviously contradict his avowed motive — to support middle-class U.S. jobs. The companies’ supporters say that prices would not actually rise much and that the United States must preserve solar cell manufacturing capacity in the interest of energy security. But the risks of helping a narrow slice of the industry at the expense of the rest of it simply outweigh the benefits.
This solar trade case may just the beginning. Shortly after it was filed, appliance-maker Whirlpool lodged a similar petition with the ITC, demanding protection from imports of washing machines from Thailand and Vietnam. Once the Trump administration signals that it is willing to misuse the nation's trade laws to help narrow special interests, uncompetitive companies in a range of industries will file their own complaints, raising everyone else's prices.
Will Mr. Trump’s effort to put “America first” be moderated by reality — or will the president plow ahead regardless of the country’s real interests?
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