Biden’s Solar Tariff Brawl – WSJ

Solar panels at a solar farm site in Portage, Penn., April 25.


Justin Merriman / Bloomberg News

Democrats are fighting over the Biden Administration’s anti-dumping investigation into Chinese solar producers, and it’s been an open brawl. The progressives wanted an abundant and cheap source of green energy to fuel American manufacturing, but they discovered they couldn’t have it all.

The Commerce Department in March opened an investigation to determine whether solar companies were circumventing anti-dumping duties on China by redirecting production to Southeast Asia. Allegations by solar power producers, rooftop solar companies and their friends in Congress that the Administration is undermining their own green energy goals.

“This investigation could expand harmful tariffs, kill jobs on solar imports, increase costs for consumers,” said 22 Senators, including 19 Party members. Democracy, warning this month.

On the other side of this battle are US solar producers, unions, and members of Congress from the Rust Belt including Ohio Senator Sherrod Brown. They warn solar imports will hit US manufacturing jobs unless Trade intervenes.

The origins of this dispute go back a decade. After the 2008-2009 recession, Democrats sold green subsidies during Obama’s stimulus as a way to revive American manufacturing. But then the Chinese figured out how to produce cheap solar panels on a large scale with cheap labor and energy (i.e. coal power). Between 2008 and 2013, global solar prices fell by 80%.

In 2012, the Obama Administration responded to complaints from US manufacturers that their overseas competitors were benefiting from government subsidies by imposing tariffs of up to 250% on goods. import from China. Forget that the Department of Energy also offers loan guarantees to Solyndra and other US startups.

Instead of boosting domestic production, the tariffs have prompted Chinese companies to shift some production to Southeast Asia. China currently accounts for only 1% of solar imports while Malaysia accounts for 31%, Vietnam 29% and Thailand 26%. US-made photovoltaic panels accounted for about 20% of the solar market last year.

US solar manufacturers now say Chinese companies are dodging tariffs. That may be true, but plunging photovoltaic panel prices are a boon for US solar. Tariffs will increase the cost of solar power generation, which will be passed on to those who pay electricity and water. Higher costs could also limit homeowners’ demand for roof shingles, which is why many Democrats howled about the Commerce Department poll from states filled with sunny.

It’s hard to sympathize with US solar companies, which benefit greatly from government mandates and subsidies, including a 26% federal tax credit. They are also supported by anti-carbon policies that have forced many nuclear and fossil fuel plants into early retirement and will destroy more jobs than they create.

The rapid expansion of renewables is also increasing the cost of maintaining a reliable grid, which will increase costs for US manufacturers, making them less competitive globally. This is why carbon tariffs – i.e. taxes levied on foreign imports based on CO2 emissions where they are produced – are attracting the attention of Congress.

The Democrats’ solar war illustrates how their climate obsession is leading to more protectionism. American consumers, workers and businesses will be the losers.

The Journal’s Editorial Report: Fears of inflation and recession put Democrats at risk. Image: AP / Shutterstock Composite: Mark Kelly

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Appears on May 23, 2022, print. Biden’s Solar Tariff Brawl – WSJ

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