by Mish Shedlock, MishTalk:
Heaven forbid consumers in the US get a break. Trump wants none of it.
I have idea. Let’s raise prices and at the same time kill anything clean energy has going for it.
We call this policy “America First”.
The Wall Street Journal reports U.S. Sets New Trade Tariffs, Signaling New Phase in ‘America First’ Policy.
President Donald Trump slapped steep tariffs on imports of solar panels and washing machines, kicking off his second year in office by showing he’s ready to start implementing his long-promised tough “America First” trade policy.
“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 Lighthizer said in a statement.
Specifically, the administration said it would impose tariffs on washing machines at a rate of up to 50%, with the rates phasing out over the next few years. The tariffs would be combined with quotas. Tariffs on solar modules would be as high as 30%, and be phased out over time.
The solar petition was filed by Suniva Inc. and SolarWorld Americas Inc., two embattled solar panel makers with operations in the U.S. that have filed for bankruptcy protection.
The washing machine petition was filed by Whirlpool Corp., which is locked in a tough competitive fight with Samsung Electronics Co. and LG Electronics Inc. of South Korea. Whirlpool’s stock rose 3% in after-hours trading in response to the move, which was announced after U.S. markets closed.
The actions drew criticism from free-market economists warning of new costs to consumers, and the dangers of trade wars. But it drew praise from some Democrats normally critical of the president, showing the potential of the new Trump trade policy to scramble the political landscape this year.
Blatant Tariff Stupidity
Trump’s action is so blatantly stupid it’s hard to remain calm.
China wants to provide cheap solar panels, supposedly at a loss to the US.
Who Wins from Cheap Solar Panels?
- US consumers who buy the panels, allegedly subsidized by China
- US companies that install the panels
- US shipping and trucking companies that deliver the product
- Local fast food restaurants where the installers eat.
- Gasoline stations where the truckers and installers fill their tanks.
Trade War Repercussions
Tariffs may save a handful of jobs at bankrupt US companies that cannot compete globally but it will be at the expense of all six of the above.
The same applies in a similar fashion to TVs, underwear, and washing machines.
China may retaliate by canceling orders from Boeing or reducing soybeans imports from US farmers.
It is not going to take much to prick various global economic bubbles. A trade war with China could do it.
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