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When it comes to Donald Trump, it will be great in future for American companies that manufacture solar panels or washing machines. At beginning of week, US president announced introduction of tariffs on solar panels and washing machines. By 30 percent alone, solar cells and modules from abroad should become more expensive. He is thus reusing his repeatedly proclaimed strategy “Make America Great Again”, which consists primarily of a protectionist economic policy.
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For several months, among or things, two US solar module manufacturers Solarword Americas and Suniva had lobbied with Trade Commission and made a strong case for customs duties on products of ir Asian competitors. One “appreciates hard work of president” and that he recognized importance of solar industry for US economy and security, exulted Jürgen Stein, board member of SolarWorld Americas, when White House now announced its decision.
SolarWorld would have to know better: Frank Asbeck, head of SolarWorld AG from Bonn (and parent company of US subsidiary), had made it in year 2013 with or European competitors that EU Commission introduced anti-dumping duties on Chinese modules. China would press solar modules with a discount of more than 80 percent in European market, according to accusation. But tariffs could not save European solar industry and halt China’s success: In May 2017, German SolarWorld had to register bankruptcy.
“America first is especially true for big business”
So why do you have a similar strategy now? “Trade policy is for Trump foreign policy,” says economist Rolf Lang Hammer from Institute of World Economy (IfW) in Kiel. “As a rule, damage tariffs almost always affect all parties involved: y cost consumer a lot and bring little more to domestic producer than a respite.” Trump is primarily concerned with protecting domestic corporations from unpleasant competition from abroad.
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The tariffs now introduced are based on a trade law from year 1974, i.e. from times of global oil crisis. It provides that US President may, on its own, temporarily introduce duties if proportion of imported goods is so large that domestic industry is “seriously at risk”. The risk has previously been confirmed by responsible American International Trade Commission. The new tariffs meet solar modules and washing machines from almost every country in world. Until now, US government had introduced anti-dumping duties only against selected companies, such as almost a year ago against steel products of German companies Salzgitter and Dillinger Hütte.
“Trump’s most important clients are shareholders of major US companies,” says Gabriel Felbermayr, trading expert at Ifo Institute in Munich. The fact that poorer families in United States suffer from customs duties at end – and se are often Trump’s voters – do not seem to care about him. “America first is especially true for big business,” says Economist.
America’s competition is intimidated
Trump has been wearing China for years. “China is our enemy. They want to destroy us, “he tweeted in July 2011. He was in election campaign. “We cannot allow China to continue raping our country.” Trump threatened to occupy Chinese goods with high tariffs. This announcement alone has had a positive impact on American economy in Trump sense: shock and awe strategy (“shock and Fear”) is a study by center of Economic Policy Research in London. The Thinktank has been analyzing trade policy of G20 countries for years. Trump’s threats would intimidate or countries: Last year, number of customs duties and or protectionist measures adopted by countries against US decreased by almost a third. A trend in sense of US government.
