Trump slaps steep US tariffs on imported washers, solar panels

Wednesday, 24 January 2018 00:06 -     - {{hitsCtrl.values.hits}}

WASHINGTON/LOS ANGELES (Reuters): U.S. President Donald Trump slapped steep tariffs on imported washing machines and solar panels on Monday, giving a boost to Whirlpool Corp and dealing a setback to the renewable energy industry in the first of several potential trade restrictions.

The decisions in the two “Section 201” safeguard cases followed findings by the U.S. International Trade Commission that both imported products “are a substantial cause of serious injury to domestic manufacturers,” U.S. Trade Representative Robert Lighthizer said in a statement.

The washer tariffs exceeded the harshest recommendations from ITC members, while the solar tariffs were lower than domestic producers had hoped for. The restrictions aim to help domestic manufacturers but drew complaints that consumer costs for new washers and solar installations will rise.

Trump will impose a 20% tariff on the first 1.2 million imported large residential washers in the first year, and a 50% tariff on machines above that number. The tariffs decline to 16% and 40% respectively in the third year.

A 30% tariff will be imposed on imported solar cells and modules in the first year, with the tariffs declining to 15% by the fourth year. The tariff allows 2.5 gigawatts of unassembled solar cells to be imported tariff-free in each year.

Whirlpool, which sought the washers “safeguard” action against rivals Samsung Electronics and LG Electronics after years of anti-dumping cases, saw its shares rise 1.8% in after-hours trade.

“By enforcing our existing trade laws, President Trump has ensured American workers will compete on a level playing field with their foreign counterparts,” Whirlpool Chairman Jeff Fettig said in a statement.

The move punishes Samsung, which recently began washer production in South Carolina, and LG, which is building a washer factory in Tennessee.

Trump ignored a recommendation from the ITC to exclude South Korean-produced washers from LG from the tariffs, as prior anti-dumping duties on these machines have been dropped. The decision could also hurt retailer Sears Holdings, whose Kenmore brand sources its larger washers from LG’s overseas factories.

The tariffs are expected to slow a shift to renewable energy in the United States, just as solar was becoming cost competitive with electricity generated from fossil fuels like coal, an industry that Trump has pledged to protect.

MJ Shiao, head of renewable energy research for Wood Mackenzie, said the tariffs would likely reduce projected U.S. solar installations by 10 to 15% over the next five years.

”It is a significant impact, but certainly not destructive to the end market,” Shiao told Reuters.

The domestic solar panel producers who sought the trade remedies wanted tariffs of 50% - the highest allowed under law. Petitioners Suniva and SolarWorld have said they cannot compete with the influx of cheap imports, mostly from Chinese producers, which has caused solar panel prices to drop more than 30% since early 2016. The U.S. solar trade group, the Solar Energy Industries Association, campaigned against the tariffs and estimated the decision would create a “crisis” for the burgeoning industry and result in the loss of 23,000 U.S. jobs this year as billions of dollars in solar investments are cancelled.

Suniva, majority-owned by Hong Kong-listed Shunfeng International Clean Energy Ltd applauded the decision, saying that Trump “is sending a message that American innovation and manufacturing will not be bullied out of existence without a fight.”

The decisions were the first of several potential tariff actions that Trump may take in the coming weeks and months. He is considering recommendations on import restrictions for steel and aluminium on national security grounds under a 1962 trade law and tariffs or other trade sanctions against China over its intellectual property practices.

The intellectual property, washer and solar panel probes were done under a 1974 trade law that has been seldom invoked since the World Trade Organization was launched in 1995.

Samsung Electronics says U.S. tariffs on washers a great loss for American consumers

SEOUL (Reuters): Samsung Electronics said on Tuesday a U.S. government decision to impose tariffs on washing machines was a great loss for American consumers and workers.

“Everyone will pay more with fewer choices,” the South Korean company said in a statement.

LG Elec says US tariff move on washing machines is ‘misguided decision’

SEOUL (Reuters): LG Electronics Co Ltd. said on Tuesday it is disappointed in the U.S. government’s move to impose tariffs on its imported washing machines, calling it a “misguided decision”.

“This is a textbook case about how certain companies can game the process to use trade laws to try to accomplish what they can’t accomplish in the marketplace,” LG said in a statement, adding the decision hinders the ramp-up of LG’s planned new plant in Tennessee and threatens new U.S. jobs.

South Korea says to complain to WTO about US tariffs on washers

SEOUL (Reuters): South Korea said on Tuesday the government will complain to the World Trade Organization (WTO) about a U.S. decision to slap tariffs on imported washing machines and solar panels, saying the decision is “excessive” and “regrettable”.

“It is clear that the latest safeguard measures would violate the WTO rules,” South Korea’s trade minister Kim Hyun-chong said in a meeting with industry officials. “We will actively respond to protectionist measures.”


China says US tariffs on imported washers, solar panels worsens global trade environment

BEIJING (Reuters): China’s commerce ministry said on Tuesday it expressed strong dissatisfaction regarding the U.S. tariffs on imported washers, solar cells, adding that the U.S. decision further deteriorates global trade environment. China hopes the United States will refrain from using trade remedies and that China would resolutely safeguard its interests, the Ministry of Commerce said in a post on their microblog.

Mexico criticises US move on imported washers, solar panels

MEXICO CITY (Reuters): Mexico’s economy ministry on Monday criticised a U.S. decision to slap tariffs on imported washing machines and solar panels and said it would use all legal means at its disposal to ensure the United States met its international obligations.

“Mexico’s government regrets the United States’ decision not to exclude Mexico from the measures taken today,” the ministry said in a statement, noting that the United States imported some $278 million worth of washing machines from Mexico in 2016.

In addition, the United States imported some $1.127 billion worth of solar panels from Mexico that year, it added.

Referring to the legal measures it would make use of to ensure the United States fulfilled its international obligations, Mexico pointed to compensation envisaged under an article of the North American Free Trade Agreement (NAFTA).