WASHINGTON: President
Donald Trump slapped steep tariffs on imports of washing machines and solar energy cells and panels on Monday, the first major step by the administration to erect the kind of trade barriers Trump has frequently said are necessary to protect manufacturers in the US.
The twin announcements came after a year of tough rhetoric — but little action — on curbing imports of cheap products from countries like China and South Korea.
White House advisers warned that additional trade measures related to steel, aluminium and other products from China could be coming, a signal that Trump is ratcheting up the protectionist policies he has long espoused as part of his "
America First" approach.
The imposition of tariffs will most likely exacerbate trade tensions with other nations, including China, and could result in an escalation of retaliatory trade measures against imports from the US. Both China and South Korea harshly criticised the move, with both suggesting they could take their complaints to the
World Trade Organization, which settles trade disputes between countries.
Protectionism was a defining theme of the populist presidential campaign in which Trump gleefully rebuffed the longstanding Republican embrace of free and open markets. The White House took action on imports of washing machines and solar products based on requests by companies who said their operations in the US were being harmed by imports. Whirlpool Inc appealed to the White House for help in curbing washing machine imports from its Korean competitors, while two solar companies, Suniva Inc and SolarWorld Americas, said imports of cheap solar cells and modules were similarly putting their companies at risk.
While the tariffs were welcomed by the companies that sought them, economists warned the levies could drive up prices for consumers and hurt some American businesses. The solar industry has been split over the tariffs; Companies that develop large-scale solar farms, as well as purchasers of solar power such as retailers and tech companies, opposed the tariffs over concerns that they would cost them more money and make solar power less competitive with other energy sources, at least in the short term.
Robert Lighthizer, the US trade representative, said the president had decided to accept the recommendations of his trade advisers in imposing tariffs ranging from 15% to 50% on various imports.
The president approved solar tariffs for the next four years, starting with levies of 30% that will ultimately fall to 15%. In each of the four years, the first 2.5 gigawatts of imported solar cells will be exempted from the tariff, an exception designed to ensure that existing solar module manufacturers in the US can still access cheap supplies of cells. The administration said that the tariffs are largely directed at China, which over the past decade has built itself into the world's largest manufacturer of solar products, flooding global markets with low-cost crystalline silicon panels. But since the US already levies many trade restrictions on Chinese products, neither measure appeared likely to put a significant dent in China's exports. Other countries may be hit harder. Currently, over 95% of America's solar panels are imported, with half of those imports coming from Malaysia and South Korea.
For imported washing machines, the president approved a combined tariff and quota for the next three years. In the first year, the first 1.2 million washing machines that are imported will face a tariff of 20%, while all subsequent imports will have a tariff of 50%. Those tariffs are then gradually phased down in the second and third years.
