The Commerce Department said on Tuesday that it would impose tariffs on solar panels imported from China after concluding that the Chinese government provided illegal export subsidies to manufacturers there.
This really just doesn’t make much sense. Protectionism rarely does. But in this instance, the policy is utterly baffling. The U.S. government is imposing tariffs on solar panels imported from China. Why? Because, it seems, the Chinese government is “unfairly” subsidizing their solar panel exports.
Let me get this straight. The U.S. government wants to move the economy towards green energy. They make all sorts of arguments about this: energy security, sustainability, breaking the addiction to “foreign oil.” Furthermore, the U.S. government thinks that this is a compelling reason for using public monies to subsidize green energy firms. Everyone knows that no one would buy solar panels or electric cars if they had to pay the “real price”, but, the argument goes, these technologies that we want to promote need a little help.
Now, assuming one accepts this basic argument, what should be the reaction to news that the government of China wants to subsidize solar panels for American consumers and businesses? The effect of this will be to increase the number of solar panels in America, the capacity of green energy infrastructure, and ultimately, contribute to the fulfilment of the goals of domestic energy policy with none of the cost.
Not only do the Americans get more solar panels, but the Chinese are paying! Not the American tax payer; not the beleaguered American federal government with its huge, unsustainable deficits. The Chinese are paying for your policies! Hurray. Good news! Why then, would you turn around and impose taxes on these imports??
(a) The green energy domestic lobby is threatened by foreign competition… and
(b) They will contribute to your re-election campaign?
Who knows?
So maybe, just maybe, Obama’s green energy campaign is not as well intentioned as it appears. If it was just about the solar panels, there is NO CASE for import tariffs.
