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Economic Watch: U.S. solar, washer tariffs spur wide opposition

Source: Xinhua| 2018-01-24 18:09:35|Editor: Yurou
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BEIJING, Jan. 24 (Xinhua) -- As leaders and business elites are gathering in Davos to discuss remedies to the world economic ailment, the latest U.S. tariff decision has sent a bad signal.

The Office of the United States Trade Representative announced Monday that the country will impose tariffs of up to 50 percent on imported washers for the next three years, and up to 30 percent on solar cells and modules for the next four years.

The decision will not only risk inflaming tensions with major trade partners, but also distort international trade order and jeopardize a hard-won global recovery that remains fragile, officials and analysts said.

The move marked the first time ever that the U.S. government has used the so-called Section 201, an outdated tool under a rarely used Trade Act of 1974, to unilaterally impose tariffs or other trade restrictions on foreign imports since 2001.

It has spurred opposition from China, the Republic of Korea (ROK) and other parties.

China's Ministry of Commerce Tuesday expressed "strong dissatisfaction" over the move, saying it exacerbated a difficult global trade environment.

The ministry urged the United States to refrain from abusing trade remedies, and said China will work with other WTO members to defend their interests.

The ROK trade minister said Tuesday that the country will file a petition with the WTO against the "unfair" safeguard measures and actively deal with the protectionist move.

Trina Solar, one of the world's largest solar module suppliers based in eastern China's Jiangsu Province, said the tariffs will lead to higher prices for solar products and have a severe impact on the investment of solar companies in the United States.

"Even if the act may provide support for U.S. domestic manufacturers in the short run, it will erode, not enhance, the sector's international competitiveness in the long term," the company said in a statement to Xinhua.

Besides denouncement from abroad, there was also backlash in the United States.

The U.S. Solar Energy Industries Association (SEIA), the national trade association for the industry, said the decision will not create adequate cell or module manufacturing to meet U.S. demand, or keep foreign-owned Suniva and SolarWorld afloat, but "create a crisis in a part of our economy that has been thriving."

The SEIA said a tariff at this level will eliminate, not add to, American manufacturing jobs. It estimated the tariffs will cause the loss of roughly 23,000 American jobs this year, including many in manufacturing, and will result in the delay or cancellation of billions of dollars in solar investments.

"There is no doubt this decision will hurt U.S. manufacturing, not help it," said Bill Vietas, president of RBI Solar, based in Cincinnati, Ohio.

Following the tariffs on solar products and washers, analysts expect the U.S. to come up with more protectionist actions this year.

Zhang Yansheng, researcher at the China Center for International Economic Exchanges, said the actions, which may include anti-dumping probes and Section 201 investigations, will risk triggering a trade war.

A trade war will be mutually destructive, Hu Zuliu, chairman of investment firm Primavera Capital Group, said during an interview.

To narrow the trade surplus, the United States should expand its exports, instead of erecting barriers to restrict imports from its trade partners, Hu said.

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