Tariff weaponization shoots US in the foot
No matter whether US President Joe Biden vetoes or not the congressional efforts to overturn his two-year tariff waiver on solar panels from four Southeast Asian nations this week, it is the United States that has paid and will continue to pay for his administration’s self-deceptive weaponization of tariffs.
In June, Biden waived tariffs on panels from Cambodia, Malaysia, Thailand and Vietnam in an effort to create a “bridge” while the US ramps up manufacturing enough to end its reliance on solar panels from China to achieve its climate change goals.
More than eight months into the tariff waiver, with the four Southeast Asian countries now accounting for about 80 percent of the US’ solar panel supplies, US manufacturers are urging lawmakers to block the executive order of the president to restore the tariffs otherwise they cannot compete with the cheap panels made overseas. The legislation, in support of those calls, and which both Democrats and Republicans endorse, is expected to come up for a full vote in the House as soon as this week.
However, the Biden administration thinks its policy has worked well and points to an increase in domestic solar manufacturing capacity since it took office, although without giving any statistics.
“This legislation would sabotage US energy security,” Ali Zaidi, Biden’s national climate adviser, told the media. “It’s not about slowing things down. It’s about fundamentally undermining our progress toward increased energy security and having the tools we need to attack the climate crisis.”
That means, although it has not stated it directly, the Biden administration thinks that US solar panel manufacturers are not yet competitive enough to outcompete Chinese companies, since to block that tariff waiver now means to reopen the US market to Chinese panels again after an eight-month respite.
The Biden administration has also ignored a question lawmakers demand it answer: What if Chinese manufacturers relocate their production lines to the four Southeast Asian countries to take advantage of its zero-tariff policy to access the US market.
Due to their unparalleled cost-performance, China’s share in all the manufacturing stages of solar panels exceeds 80 percent. It is almost impossible for the US, and other major consumers of solar panels, to shun away from Chinese equipment completely.
What’s more, the fact that the Biden administration has been able to advance its ambitious green energy program at home is largely attributable to its zero-tariff policy for solar panels. That has been done without the energy security of the US being compromised or threatened by China.