Editorial: Trump’s ‘America First’ plan for solar panels and washers is going to cost consumers and workers dearly
As President Trump was signing orders Tuesday to impose stiff tariffs on imported solar-power cells and washing machines, most of which come from Asia, negotiators for 11 other countries in Asia and the Americas were reaching final agreement on a trade agreement to increase commerce between them and make their economies less reliant on China.
The contrast could not be more vivid or revealing. The administration’s Fortress America approach to trade is based on the far-fetched notion that we can lift U.S. manufacturing by building tariff walls that punish foreign competitors and bludgeoning our trading partners to accept more of our goods. The countries in the new Trans-Pacific Partnership — a pact Trump abandoned as soon as he took office — are embracing lower trade barriers and higher labor and industrial standards, knowing that the payoff historically has been faster economic growth.
Trump insisted Tuesday that the tariffs and quotas he was imposing — starting at up to 30% on solar cells and up to 50% on washers, then phasing out over time — would help Americans. “We’re going to benefit our consumers, and we’re going to create a lot of jobs,” the president said.
Consumers don’t benefit when prices go up, and that’s the whole point of these tariffs.
That’s so divorced from reality, it’s as if Trump were channeling Lewis Carroll. Consumers don’t benefit when prices go up, and that’s the whole point of these tariffs — to drive up the cost of foreign solar panels and washing machines because, without that protection, American companies are unable to compete. In fact, the Wall Street Journal reported Wednesday, Korean consumer-electronics giant LG told retailers this week that the “trade situation” is forcing its washer-dryer prices up by about $50. Perhaps the president is one of those people who enjoys a good price hike, like the imaginary folks in the DirecTV commercials who cackle with joy when they sit on chewing gum or walk into a glass door.
Nor are the tariffs likely to lead to a net gain in jobs. Higher prices for solar cells will reduce demand, leading to job losses among solar panel installers and others in the broader renewable energy industry — which employs far more people than the U.S. manufacturers of solar cells do. Meanwhile, Chinese manufacturers have moved “light years” ahead of their U.S. counterparts, according Varun Sivaram, an expert on solar power at the nonpartisan Council on Foreign Relations, enjoying massive scale, extremely low costs and optimized supply chains. Tariffs can’t turn back the clock on those advances.
Trump hinted that more broad, protectionist tariffs will follow, making it even more certain that China and other foreign countries will retaliate by cracking down on U.S. products, evaporating jobs in those industries. The likely result is a tit-for-tat escalation that cuts the United States off from the rest of the world’s economies and their growth. But then, that seems to be the president’s goal.
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