U.S. President Donald Trump has approved steep tariffs on imports of solar panels and washing machines to protect U.S. producers, triggering an outcry in China and South Korea and even protests at home.
Seoul said on Tuesday that it planned to take the issue to the World Trade Organization while Beijing expressed “strong dissatisfaction”.
“Together with other WTO members, China will resolutely defend its legitimate interests,” its Commerce Ministry warned, without indicating any specific counteraction.
Solar industry’s criticism
At home in the U.S., the move was decried by the solar industry, which said the tariffs would create a “crisis” and cost thousands of U.S. jobs and billions in investment without helping domestic suppliers meet rising demand.
U.S. Trade Representative Robert Lighthizer said the tariffs were imposed after an “exhaustive” review by USTR and the independent U.S. International Trade Commission, which determined that U.S. producers were “seriously injured by imports”.
The administration imposed tariffs of up to 50% on imports of large washing machines over three years, and up to 30% on solar panels over four years.
South Korea, which has signed a free trade deal with the U.S. and is a crucial ally in Washington’s confrontation with North Korea, said it would a file a petition at the WTO. Its Trade Minister Kim Hyun-Chong said the tariffs were “excessive” and may constitute a “violation of WTO provisions”.
Samsung, South Korea’s biggest firm, said the tariffs were “a tax on every consumer who wants to buy a washing machine”. “Millions of Americans love their LG washers,” said another South Korean company, LG Electronics, taking umbrage at the decision.
Last year Mr. Trump launched dozens of trade cases, taking what his commerce department called “unprecedented” action on trade. Many have targeted China, the U.S.’s biggest trade partner, which last year ran a record surplus with the U.S., inciting new ire from Mr. Trump.
Targeting Chinese imports can cut both ways for the U.S. Imports of cheap Chinese panels helped triple U.S. annual solar electricity generation between 2012 and 2016. But they also drove prices down by 60%, causing most U.S. producers to stop production or declare bankruptcy, the USTR said. The rising imports were spurred by China’s use of state incentives, subsidies and tariffs, and manufacturers have evaded compensatory U.S. tariffs by repeatedly shifting production to new countries, USTR said.
Chinese-made washing machine imports led to a “substantial” decline in market share for U.S. producers, according to USTR.
The director of the Chinese Commerce Ministry’s trade and remedy investigation bureau said in a statement the U.S. tariffs “not only aroused the concern of many trading partners but were also strongly opposed by many local governments and downstream enterprises in the U.S”.
The U.S. investigation into solar imports was launched following complaints from U.S. companies Suniva, a bankrupt Chinese-owned firm, and SolarWorld, owned by a German concern that declared insolvency in May.
The Solar Energy Industries Association (SEIA) said its members expressed “disappointment” at the decision.
The new tariffs will cause the loss of about 23,000 American jobs and the cancellation or delay of billions of dollars in solar investment, the group said in a statement. The tariffs will not help meet U.S. demand but “will create a crisis in a part of our economy that has been thriving, which will ultimately cost tens of thousands of hard-working, blue-collar Americans their jobs”, said SEIA president Abigail Ross Hopper.
