It is reassuring, to an extent, that Tesla seems unworried about the tariff the Trump administration slapped on imported solar panels and cells this week. The gigantic plant at RiverBend, built at state expense, is devoted to solar energy and represents Buffalo’s best hope for a new high-tech economy.
Even still, the administration’s decision is wrong, and on a couple of counts. Western New York’s congressmen and any others who still believe in the net benefits of free trade should continue to make an issue of this. In particular, Rep. Chris Collins, R-Clarence, needs to make use of his close ties to President Trump.
Trump had threatened to impose the tariff, so it didn’t come as a complete surprise. But he had been warned of its potentially harmful effects on U.S. businesses and went ahead with them anyway, levying a 30 percent tariff on solar cells and panels made outside the United States. He also imposed a 20 percent tariff on washing machines made by companies such as LG and Samsung. Other tariffs may be coming, threatening retaliation by other nations.
Some local industries wanted the protections. Whirlpool asked the government for relief from its foreign competitors in the washing machine market. That wasn’t because of unfair trade, but because Whirlpool wasn’t competing well: Too many Americans wanted the foreign-made washers.
In the solar market, Suniva and SolarWorld sought a shield. But no one should think that these tariffs will protect American jobs without unwanted and perhaps dangerous repercussions.
Tesla’s nonchalance aside, economists are already sounding the alarm that the market for solar power could suffer as the tariff increases the cost of manufacturing panels. That’s a blade at the throat of Buffalo’s economic future.
More than Western New York’s self-interest is at stake. By discouraging growth of solar, the administration is also bolstering the fossil fuel industry, whose emissions warm the climate, with potentially catastrophic consequences. Ask the people of Houston about those.
Fossil fuel emissions also create other hazards, such as air pollution. The costs of dealing with all those issues are borne not by the industry, but American taxpayers, who are now paying three times: through subsidies created by tariffs; through the rates they pay for power; and through the costs of cleaning up afterward.
That’s not an argument to shutter or even penalize existing power industries, including coal and natural gas, the latter of which is plentiful and relatively clean. They remain essential to Americans who rely on them.
But it does require deeper thinking than appears to have gone into the solar tariff or, for that matter, the one on washing machines. Federal energy policy needs to focus on shepherding the country toward renewable energy while helping areas economically reliant on fossil fuels to transition away from them. It’s not enough for the administration simply to play to Trump’s protectionist campaign promises.
It’s no surprise that much of the domestic solar industry opposed the protectionist measures. Its trade group, the Solar Energy Industries Association, warned that the tariffs would cost the jobs of 23,000 American installers, engineers and project managers. It said as many as a third of the 260,000 Americans working in the solar industry are at longer-term risk of losing their jobs. This, remember, is from the industry that these tariffs are supposed to protect.
The broader risk is in a trade war, in this case with China and other manufacturers of solar panels and cells. That may not be likely in the current case, but other decisions are in the administration’s pipeline, including possible tariffs on steel and aluminum. With each, the risk rises.
Trade policies are always double-edged, and no American should have a problem when the United States protects its interests by seeking to enforce existing laws. Still, the net, long-term benefit to the country and the world is in free trade which, at one time, Republicans favored.
This is a risky policy with few prospects of a long-term benefit for Americans manufacturers or consumers. And, with the solar tariff, Washington is threatening Western New York. This fight cannot be over.