By Jacob M. Schlesinger and Erin Ailworth
WASHINGTON -- President Donald Trump slapped steep tariffs on
imports of solar panels and washing machines, kicking off his
second year in office by showing he is ready to start implementing
his long-promised "America First" trade policy.
The moves were announced Monday in response to U.S. industry
pleas for relief from a recent flood of cheap imports and are the
first of what administration officials said would be a series of
trade-enforcement actions in the coming months.
The tariffs are aimed mainly at Asian manufacturers -- Chinese
makers of solar panels and South Korean producers of washing
machines. But the administration announced few exceptions for any
countries, indicating a willingness to impose comprehensive new
protective policies for U.S. companies against global competition.
The new curbs also would affect trading partners from Mexico and
Canada to Europe.
"The president's action makes clear again that the Trump
administration will always defend American workers, farmers,
ranchers, and businesses," U.S. Trade Representative Robert
Lighthizer said in a statement.
The president plans to hold a signing ceremony of the measures
in the Oval Office Tuesday, publicly touting his newly muscular
trade-enforcement policy three days before he plans to explain that
approach to a skeptical audience at the World Economic Forum in
Davos, Switzerland.
Specifically, the administration said it would impose tariffs on
washing machines at a rate of up to 50%, with the rates phasing out
over the next few years. The tariffs would be combined with quotas.
Tariffs on solar modules would be as high as 30%, and also would
phase out over time.
The solar petition was filed by Suniva Inc. and SolarWorld
Americas Inc., two embattled solar panel makers with operations in
the U.S. that have filed for bankruptcy protection.
The washing machine petition was filed by Whirlpool Corp., which
is locked in a tough competitive fight with Samsung Electronics Co.
and LG Electronics Inc., both of South Korea. Whirlpool's stock
rose 3% in after-hours trading in response to the move, which was
announced after U.S. markets closed.
The actions drew criticism from free-market economists warning
of new costs to consumers and the dangers of trade wars. But it
drew praise from some Democrats normally critical of the president,
showing the potential of the new Trump trade policy to scramble the
political landscape this year.
"I applaud the administration for this strong relief," said Ohio
Democratic Sen. Sherrod Brown, who faces a tough re-election fight
in a hard-hit manufacturing state that Mr. Trump carried in the
2016 election.
Some of Mr. Trump's fellow Republicans weren't as sanguine.
"Here's something Republicans used to understand: Tariffs are taxes
on families, " Nebraska GOP Sen. Ben Sasse said in a statement.
Mr. Trump has long promised to pursue a harder trade line by
dusting off little-used trade laws that had largely been avoided by
his predecessors, especially since the 1995 creation of the World
Trade Organization, whose goal has been to discourage such
unilateral actions by nations.
The Trump administration is imposing the new barriers under a
1974 trade law that permits companies to seek relief if they can
prove "serious injury" from a sudden surge in imports. That
"safeguard" law was last invoked by the George W. Bush
administration in 2002 to protect steelmakers, but it later removed
the steel tariffs after the World Trade Organization deemed them
improper.
No president has considered such protections since then. Now the
Trump administration has taken up two "safeguard" cases, and with
the president approving new tariffs in both cases, more industries
are expect to follow in seeking similar relief.
In addition, the administration is weighing new protections for
the steel and aluminum industries in the name of national security,
invoking a law that hasn't been used since the 1980s. Decisions are
expected by April.
Officials also are expected to announce soon recommendations for
potential sanctions against China in retaliation for allegedly
forcing U.S. companies to turn over valuable intellectual
property.
Indeed, administration officials say that there will be a much
greater focus this year on attacking Beijing's government-steered
trade policy, and the $300-billion-plus annual U.S. trade deficit
with China.
While Mr. Trump had been extremely critical of Chinese trade
policy during the presidential campaign, he largely held back from
taking action last year, in part because he was seeking cooperation
in reining in North Korea's nuclear arms program.
"If you look at solar closely, you have a clear example of
Chinese industrial policy propping up an industry, creating excess
capacity in an industry, there being significant harm to the United
States and globally as well," a White House trade official told
reporters. "We need to figure out how to deal with that, not just
for the solar industry, but for a lot of different industries where
you're going to see the same playbook trotted out."
Both the washing machine and solar actions are likely to face a
challenge from trading partners before the WTO. Since the
organization's creation, the U.S. has invoked the safeguard law six
times. Each action has been taken to the trade courts in Geneva,
which often have deemed them improper.
Under the trade rules invoked by the Trump administration Monday
-- Section 201 of the 1974 trade act -- Suniva, SolarWorld, and
Whirlpool first needed to get approval from the independent U.S.
International Trade Commission to declare that they qualified for
safeguard relief.
The four-member panel voted unanimously in both cases to support
the petitions, and then recommended to the White House late last
year that it impose some form of protection for the domestic
industry. The Monday announcement came days before the White House
faced a legal deadline to respond to the ITC recommendation.
In anticipation of the Trump move, foreign makers of both
washers and solar panels ramped up exports to the U.S. at the end
of 2017 to get ahead of the barriers, and consumers could now see a
sudden drop in supply.
The remedies imposed by the administration fell short of
requests from the solar and washing-machine makers, which had both
sought steeper tariffs. But both groups praised Mr. Trump for his
actions. Suniva thanked the Trump administration "for holding China
and its proxies accountable."
"Today the president is sending a message that American
innovation and manufacturing will not be bullied out of existence
without a fight," the company said.
Whirlpool Chairman Jeff M. Fettig issued a statement thanking
the Trump administration and calling the washing machine decision
"a victory for American workers and consumers alike."
U.S. solar-panel installers, who have benefited from the surge
of cheap imports, attacked the decision.
Ed Fenster, co-founder and executive chairman of Sunrun Inc., a
solar installer based in California, called on "states with huge
solar workforces, from South Carolina to California" to "step up to
overcome this federal headwind" with offsetting policies.
The Solar Energy Industries Association, a group that represents
installers and others across the solar industry, and which opposed
the protection petition, estimates that the tariffs imposed by the
Trump administration will cost 23,000 jobs this year and result in
the delay or cancellation of billions of dollars in solar
investments. "They will create a crisis in a part of our economy
that has been thriving," said Abigail Ross Hopper, president of the
association.
South Korea's LG Electronics Inc., in a statement, said it was
"very disappointed in this misguided decision," adding that; "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."
In both the solar and washing machine cases, the U.S. industry
had earlier won protection from imports under more commonly used
trade laws designed to offer protection against goods that are
improperly subsidized, or "dumped" -- sold unfairly below cost.
But in both cases, they said that foreign rivals simply shifted
production to other countries to avoid the tariffs, prompting the
demands the Trump administration provide bigger, blunter trade
protections provided under the safeguard law.
--Andrew Tangel contributed to this article.
Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com and
Erin Ailworth at Erin.Ailworth@wsj.com
(END) Dow Jones Newswires
January 22, 2018 21:29 ET (02:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.