Trump move to tax some imports creates its own risks for U.S.
President Donald Trump’s move Tuesday to tax imported solar cells and washing machines is meant to make good on his vow to reverse decades of U.S. support for free trade and to protect American jobs from foreign competition.
But the tariffs — already denounced by China, Germany and Mexico — are likely to heighten tensions between the United States and its trade partners, slow the U.S. solar-installation business and raise prices for American consumers. And even touchier trade cases lie ahead, involving China’s overproduction of steel and aluminum and its theft of trade secrets, with consequences for American industry and workers.
“My administration is committed to defending American companies, and they’ve been very badly hurt from harmful import surges that threaten the livelihood of their workers,” Trump said as he signed the tariffs. “The United States will not be taken advantage of anymore.”
Trump had campaigned on the argument that foreign nations had long outmaneuvered the United States at the negotiating table and had unfairly subsidized their own industries at the expense of American jobs. He pledged to return manufacturing jobs to America by killing or renegotiating trade deals and cracking down on such countries as China and Mexico that sell more to the United States than they buy from it.
Some manufacturers planning or operating plants in Tennessee welcomed Trump’s move despite complaints that the action will raise consumer prices and could end up costing more jobs than it saves.
Whirlpool Corp., which makes ovens and stoves at its plants in Cleveland, Tenn., petitioned for the import quotas to limit what it said was unfair dumping of washing machines by China on the U.S. market.
“This announcement caps nearly a decade of litigation and will result in new manufacturing jobs in Ohio, Kentucky, South Carolina and Tennessee,” the company’s chairman Jeff M. Fettig said. “This is a victory for American workers and consumers
“My administration is committed to defending American companies, and they’ve been very badly hurt from harmful import surges that threaten the livelihood of their workers. The United States will not be taken advantage of anymore.”
— PRESIDENT DONALD TRUMP
alike. By enforcing our existing trade laws, President Trump has ensured American workers will compete on a level playing field with their foreign counterparts, enabled new manufacturing jobs here in America and will usher in a new era of innovation for consumers everywhere.”
Whirlpool Corp. added 200 new full-time positions at its manufacturing plant in Clyde, Ohio, in anticipation of increased demand following a safeguard remedy decision.
Whirlpool complained about low-cost competition from rivals Samsung and LG.
The first 1.2 million washing machines imported each year will face a 20 percent tariff, with additional imports facing a 50 percent tax. Under Monday’s announcement, parts also will be hit with a 50 percent tariff.
“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 E. Lighthizer said in his announcement.
Trump acted under a provision of U.S. trade law authorizing global or “safeguard” tariffs, which had not been used since President George W. Bush levied tariffs on imported steel in 2002.
Until now, American companies typically have shied away from requesting safeguard help, fearing that presidents of both parties who favored globalization would reject their pleas.
But Trump has changed that calculus. “The signal is: If you have any credible claim, now’s a good time to bring it,” said an industry executive who spoke on the condition of anonymity because he was not authorized to speak publicly.
Samsung in a statement called the decision “a great loss for American consumers and workers. This tariff is a tax on every consumer who wants to buy a washing machine. Everyone will pay more, with fewer choices.”
But both Samsung and LG announced plans last year to open new factories in the United States.
Samsung’s facility in Newberry, S.C., already has begun initial production. LG’s plant in Clarksville, Tenn., is scheduled to begin turning out new washing machines in 2019.
Almost as soon as he took office, Trump abandoned an Asia-Pacific trade pact negotiated by the Obama administration. And Trump’s trade team is engaged in a contentious effort to rewrite the 24-year-old North American Free Trade Agreement with Canada and Mexico.
But until Tuesday, the administration had not imposed major tariffs on imported goods. It is now slapping an immediate tariff of 30 percent on most imported solar modules; the rate will gradually phase out in four years. For large residential washing machines, tariffs will start at up to 50 percent and phase out after three years.