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US Puts Tariff On Chinese Solar Panels 311

Posted by timothy
from the why-not-just-sink-5%-of-the-ships? dept.
retroworks writes "Two stories in Digitimes make a puzzle of economic policy. U.S. and European tax incentives and stimulus increase steady demand for solar panels. The Chinese government subsidizes production of solar panels to meet this growing demand. The U.S. and EU complain, and place tariffs on Chinese solar panels. Do allegations that China has used government funding to subsidize the production trump our desire for cheaper solar power? Subsidizing demand led to subsidized production. In other words, one market interference (subsidized demand for solar) leads to its counterpoint, government tariff and taxation of the same product."
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US Puts Tariff On Chinese Solar Panels

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  • by Anonymous Coward on Saturday March 24, 2012 @10:33AM (#39460473)

    Oh, noes! The Chi-coms are subsidizing their solar panel industry production!!! We can't have that. We must impose trade sanctions on them. What has the world come to!

    It's not like the Obama regime could possibly ever, ever, have their cronies in the Dept. of Energy dump billions of taxpayer dollars into solar panel manufacturers run by their fat-cat campaign donors, companies like Solyndra ...oh wait.

  • by Shoten (260439) on Saturday March 24, 2012 @10:51AM (#39460579)

    There's a larger game afoot here than just price. This is about what happens in the long-term when a country unfairly supports a domestic industry and artificially lowers the cost of that industry's products on the marketplace. What results from this is the failure of producers of that good in other countries, which in turn results in a monopoly, or at the very least, market share dominance. Then, the prices can go back up, leaving other countries with less competition and a strategic disadvantage. In this case, that disadvantage also includes an energy source, so there's a double-risk.

    And yes, I know...they can always just start up new companies, right? Wrong...it's not that easy. Because in the meanwhile, the surviving companies have been able to invest in R&D, and further lower costs, improve manufacturing processes, and innovate, all of which raise the barrier to entry in the market. And even if a company elsewhere comes onto the market and starts competing effectively...China would only have to start subsidizing their own industry again to put them at a disadvantage, and the cycle repeats itself.

  • by ThorGod (456163) on Saturday March 24, 2012 @11:02AM (#39460623) Journal

    I'm all for placing tariffs on all Chinese imports. Yes, that raises prices on our end with respect to imports from China. China has a history of dumping (look up the term). The US needs to place tariffs on Chinese products to reduce the impact of its dumping procedures.

    Tariffs on solar panels from China are not inconsistent with subsidies on solar panels. Why? Because while subsidies (artificially) increase demand in a good; tariffs (artificially) decrease demand in a good. The combined affect gently nudges people to purchase solar panels not produced in China.

    And that, my friends, is how tariffs and subsidies can apply to the same market.

  • by Anonymous Coward on Saturday March 24, 2012 @11:21AM (#39460711)

    The subsidizes are to promote solar panels usage (generally a good thing) while the tariff is to counteract China's subsidies (dumping). Note, this is purely for China and not for solar panels made in other countries, especially those made locally. Letting China have such a large advantage due to China's subsidies would only hurt the US in the long term (see situation with rare earth metal as an reference). If you are complaining about the free market, well it's not already free due to China's subsidies and this would only level the playing field.

  • Re:well... (Score:5, Informative)

    by realityimpaired (1668397) on Saturday March 24, 2012 @11:26AM (#39460721)

    Because that's exactly what they did with the mining industry and rare earths? The US was, at one point, the largest supplier in the world of rare earths. You didn't dig them all up, they're still there in the ground, though today there's almost no rare earth production in the US.

    What happened? China flooded the market with low cost minerals whose production was effectively subsidized by the significantly less stringent environmental controls, and US-based business couldn't keep up. And of course now that there's no rare earth production outside of China, they've started hoarding it and are interfering with and manipulating the world market.

    In other words... China may be taking a loss right now, but will they still be 5 years from now?

  • by Anonymous Coward on Saturday March 24, 2012 @11:28AM (#39460729)

    The genius of talk radio is that their average listener is content to make judgements on policy based on at most two pieces of information, e.g.

    1. US government is subsidizing purchases of solar panels
    2. US government has just slapped import tax on solar panels
    3. ?? (start of another five minute rant on "libs", Pelosi, Holder, Obama, birth certificates, etc.)
    4. Slashdot: +5 Insightful

    Apparently there is not enough cognitive room for additional relevant information:

    1. US government is subsidizing purchases of solar panels
    2. Chinese solar panel manufacturers are subsidized, so they can undersell the US manufacturers
    3. US government has just slapped import tax on solar panels
    4. Hey, that makes sense! (but it doesn't move Viagra, hair restoration, or debt mitigation services)

  • policical move (Score:0, Informative)

    by Anonymous Coward on Saturday March 24, 2012 @11:39AM (#39460763)

    The tariffs are so miniscule they'll have no effect. This is a publicity stunt. And a typical Obama move - trying to make each side happy, but really doing nothing positive. This is the same guy that said that increasing the supply of oil would have no effect on its price. He may be well intentioned, but he's just plain dumb. His only skill is reading a teleprompter.

  • Re:well... (Score:4, Informative)

    by Anonymous Coward on Saturday March 24, 2012 @12:37PM (#39461055)

    Unions and environmental regulations do not destroy markets. They ensure that people actually pay.

    Without environmental regulation, every company in the US would be able to say "fuck it, I'll just dump this poison in the water supply, then I don't have to spend a dime dealing with it". It externalizes costs of production and forces everyone else to either pay for dealing with the problem or in some cases get fucked over because there is no effective way to deal with a problem once its already happened. Environmental regulations do not increase cost, they prevent the externalization of cost. This was how the US was a hundred years ago, and it is only through environmental regulation that it has changed.

    A similar argument goes for unions. Why care about workers hours, pay, safety conditions, even survival if you can abuse them for less and they don't have the power to negotiate for their own survival? This was how the US was a hundred years ago, and it is only through the effort of unions that it has changed.

    A lack of environmental regulation and unions perverts the free market by allowing certain players to force others into unequal commitments for their own profit and externalizing the damage and costs of their operations.

  • Re:well... (Score:4, Informative)

    by Mspangler (770054) on Saturday March 24, 2012 @12:58PM (#39461171)

    "Five years from now, they will have a lot less money, and when they try to jack up the prices, we will be competitive again."

    Except that it takes three to five years to build the factory, so they have a window of opportunity to gouge while you ramp up.
    By way of example, they are trying to restart RE production at the mine in CA. It should be going again in a couple more years.

       

  • Your examples are flawed:

    1. Apple's resurgence was due to the iPod, a market that Microsoft didn't have any hardware that could compete with. Microsoft continues to be the only vendor to sell stand-alone desktop operating systems that are not tied to hardware. The "Microsoft browser monopoly" never existed (Netscape had a near-monopoly at first, remember?).

    2. KMart never had a retail monopoly. Until it merged with Sears, the two were always competitors in the down-market retail sector, and sears was the leader for decades.

    3. "The DVD/Bluray Consortium Monopoly" is total BS - that's like arguing "The Hard Drive/SSD Consortium Monopoly" or "The Car and Truck Monopoly". If you want to make such a comparison, I'll do the same with the "7 laptop manufacturers in Taiwan with factories in China" who actually DO have a world-wide monopoly. But does any one of them have a monopoly? No - they compete like crazy.

    4. You could "go on and on", and maybe eventually you'll find some valid examples, but these were not them.

    I challenge you right now to give an example of a company that held its monopoly more than 20 years. (You won't find any because it doesn't exist; the free market is self-correcting. High priced costs lead customers to seek lower-cost alternatives.)

    Easy-peasy: Monopoly of more than 20 years: IBM Mainframes - well over 90% of the market [wikipedia.org] - anything over 80% is considered a de facto monopoly for anti-trust purposes.

    So please explain how IBM continues to not just monopolize the mainframe, but grow it over more than half a century, if it's not possible for such a monopoly to exist more than 20 years?

    Then there are the sports franchise monopolies. Is anyone seriously challenging the NHL in profiessional hockey, the NFL in professional football, or MLB in professional baseball? No, and for most of the last century, the courts have recognized that the baseball monopoly is exempt from anti-trust laws.

    So that's 4 strikes against your argument that no monopoly has ever existed for more than 20 years - those 4 certainly have, and still exist today. :-)

  • Re:well... (Score:5, Informative)

    by ShanghaiBill (739463) on Saturday March 24, 2012 @04:20PM (#39462267)

    Pressure from the western world has caused Foxconn and other Chinese manufacturers to raise wages for their employees.

    Not true. Foxconn couldn't care less what the "western world" thinks. They raised wages because too many of their employees where quiting.

    Let me explain how things work in China: You are paid a monthly wage, plus a rather substantial bonus, which is almost always paid right before the lunar new year, when the factory shuts down for the holiday. So if you are thinking of quitting, it usually makes sense to wait for your bonus, go home for the holiday, and then just not come back. This happens every year. But this year many more people didn't come back. Most of this was because of strong economic growth in inland areas, so people can find good job opportunities close to home. These jobs typically don't pay as well as Foxconn, but people can work without being separated from their families.

    Foxconn, and other large employers, all raised wages just a few weeks after the lunar new year, to lure these people back.

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