If President Obama initiated tariffs with investments at home in green energy would have Solyndra left the USA?
Yesterday, President Trump levied tariffs on US steel and aluminum. (click here) Other countries will seek to regain the market in the USA by challenging all these tariffs within the WTO. It will take years if not more than a decade, but, the USA legitimately has economic dynamics that require tariffs to protect USA interests within it's sovereign markets.
The economy of the USA is driven by middle class wages. In that is the understanding as to the quality of the products available and the price paid for them. The USA has been quickly becoming a Third World economy in that it is dominated by far cheaper products than can be produced in the USA.
I have no doubt the BRIC countries will work hard to build their middle classes, but, until they do they are dependant on buyers outside their borders. It is not wrong to say the advances in Chinese weapon systems are paid for by American consumers. That will not be the case forever as China is appreciating a better quality of life for the Chinese people with increased numbers of paid work and being middle class.
The tariffs serve several purposes. Ultimately, it will increase the jobs in the USA, but, it is uncertain as to when. US companies have to gear up for larger manufacturing facilities. I don't remember US grants to spur that transition, but, eventually, it will happen. Investors will come forward to regain market share and confidence and the growth will occur.
The tariffs will also increase the growth of the middle class in other countries that currently have no real incentives to conduct education, training or investment.
So, are the Trump tariffs wrong? Not exactly. What is wrong is the way in which they are implemented. There is no lead time to implementation and businesses abroad and domestic have no way of compensating the depth of the change of a USA tariff. This is the same implementation that occurred with the US Tax Code and it is a mess without many confusing errors within the text.
Real people will lose their jobs, real people will lose on investments, but, in the long run these tariffs will be effective in the way they were meant to be effective. There are right and wrong ways of implementing a policy that effects lives both domestic and foreign.
President Obama may have considered tariffs on solar panels imported from abroad, but, living within the WTO strucutre he would have decided there was no reason to carry out tariffs that would ultimately be overrident by the international organization. It is anyone's guess how this all shakes out once the tariffs make their way into international tribunals and courts; but, I guarantee the WTO decisions will come just as the markets and manufacturers have fully compensated for their parts in the economics dictated by Trump tariffs.
Welcome to Trump World.
March 1, 2018
By Mythili Sampathkumar
US President Donald Trump's tarrif (click here) on imported solar panels has caused one American company to sack hundreds of its workers, according to its CEO.
Tom Werner of SunPower said the company has started the process to let go 150 to 250 people due to an expected loss of $50m this year alone due to the 30 per cent tariffs.
The publicly traded company will ultimately be able to save 10 per cent in operational costs through the cuts, Mr Werner told The Hill newspaper.
Mr Trump approved the tariff in January 2018 executive order, claiming: "You're going to have people getting jobs again and we're going to make our own product again. It's been a long time”.
The problem: only 14 per cent of the 260,000 people who spend “a majority of their time on solar projects” are in panel manufacturing - most are involved in the installation of panels and associated products and services, according to the New York Times.
The tariff is designed to help US manufacturers of solar panels to compete with lower-priced Chinese imports.
The tariff angered the $28b solar power industry in the US, which gets about 80 per cent of its products through imports....
