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New tariffs could raise price of washing machines, hurt solar industry jobs

Wed, 24 Jan 2018 00:06:47 +0000

iStock/Thinkstock(WASHINGTON) -- President Donald Trump signed a measure Tuesday that would enact new tariffs on residential washing machines and solar cells imported to the United States.

“The ITC found that U.S. producers had been seriously injured by imports and made several recommendations to the president," U.S. Trade Representative Robert Lighthizer said in a statement Tuesday. "Based on this information, the Trade Policy Committee developed recommendations, which the President has accepted. The president’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers, and businesses in this regard.”

The tariffs on solar modules and cells start at 30 percent in the first year and gradually go down in subsequent years. For washers, there's a 20 percent tariff on the first 1.2 million finished washers imported, which jumps to 50 percent for all washers above that number in the same year, according to the Office of the United State Trade Representative. The initial tariff for washers drops each subsequent year by 2 percent.

'Modest' price increase for some washing machines?

The International Trade Commission's recommendations to the president said there would likely be a "modest increase" in prices for washing machines as a result of the tariffs and that fewer machines would be imported, which companies said could result in fewer choices for consumers.

The decision to add tariffs to imported washing machines comes after Whirlpool filed a petition alleging that Samsung and LG were selling washing machines in the U.S. at prices lower than in the companies' home countries, a practice known as "dumping." Whirlpool claimed that the companies moved their washer production to countries like Vietnam and Thailand to continue selling cheap washers in the U.S.

Whirlpool said in a statement that the decision will result in new manufacturing jobs in states like Ohio, Kentucky, South Carolina and Tennessee. A Whirlpool spokesman accused overseas companies of not having consumer interests at heart and said they were trying to force domestic companies out of the market with below-cost prices.

Samsung and LG, both companies based in South Korea, said the decision could raise the prices of their washing machines in the U.S. or make choices more limited.

Samsung said in a statement that "everyone will pay more, with fewer choices" because of the tariffs. LG said in a statement that it was too early to speculate on price changes for consumers but echoed Samsung by saying that consumers could see more limited choices when it comes to LG brand washers. Both companies said they have or are in the process of opening manufacturing facilities in the U.S.

Solar industry says tariff could hurt U.S. jobs

Solar energy companies said that the tariff will actually hurt the industry and potentially eliminate 23,000 jobs due to declining demand and lost investments.

“There’s no doubt this decision will hurt U.S. manufacturing, not help it,” said Bill Vietas, president of RBI Solar in Cincinnati in the industry group statement. “The U.S. solar manufacturing sector has been growing as our industry has surged over the past five years. Government tariffs will increase the cost of solar and decrease demand, which will reduce the orders we’re getting and cost manufacturing workers their jobs.”

In 2016 renewable energy sources like solar and wind made up 10 percent of energy consumption in the U.S., according to the Energy Information Administration.

The tariffs the president signed into effect Tuesday came after Suniva Inc., a solar manufacturer in Georgia, filed a petition asking the International Trade Commission to look into whether so many solar cells were being imported that it hurt the domestic industry. Suniva is now owned by a Chinese company, Shunfeng International, and the other company that joined the petition, SolarWorld Americas Inc., based in Oregon, is the U.S. branch of a company based in Germany. Suniva declared bankruptcy in 2017 and has asked for extensions on its bankruptcy filings, according to Reuters, because trade tariffs would be an essential part of restructuring the business.

But 27 other manufacturers asked the U.S. trade commission not to implement the tariffs, saying that the tariffs would more than double the price of solar panels, hurt demand and, in turn, threaten jobs at factories in the U.S.

Dan Whitten, communications director for the solar industry group the Solar Energy Industries Association, said the companies are counting on the tariffs.

"These companies have nothing to live for except the tariffs which will bail them out," Whitten said.

A nonprofit energy group called the Rocky Mountain Institute said Tuesday that 35 solar industry groups have committed to developing a low-cost solar product to offset any price increase when the tariffs go into effect.

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