In this article, Diane Cardwell and Keith Bradsher examine
the trade dispute between America and China over China’s import dumping of
solar panels in America. In 2012, Chinese companies were proven to have been
granted subsidies while selling their products in America for less than it took
to produce them. The disagreement began in 2011 when a German solar panel
producer, SolarWorld, filed a case against Chinese solar panel manufacturers for
competing unfairly in America. America’s solution for this problem was to impose
a 24% to 36% tariff on solar panels imported into America. However, those
opposing the tariffs coincide with what we have learned in class this week.
Imposing tariffs on Chinese solar panels will not penalize the Chinese
companies but only hurt American consumers. The only party losing in the
current situation is American solar panel manufacturers. This is unfortunate
and something should be done to allow American, Chinese, and German solar panel
producers to compete equally but imposing tariffs at the expense of American
consumers is unfair.
Another possible solution that would allow American solar
panel companies to better compete with foreign companies would be to provide
subsidies to American companies. Just as we have demonstrated in class,
providing subsidies for companies delivers nearly the same outcome as tariffs
without the negative effects falling on consumers. For the solar panel
situation in particular, subsidies seem to be a better alternative to tariffs
because they will make it easier for American companies to compete with the
Chinese and reduce the negative effects incurred by American consumers.
I agreed that high tariffs is hurt to the American consumers unfair.
ReplyDeleteI remember that when we used solar panels in 1999, the cost was very expensive. The cost to setting this solar panels systems are over $35,000for whole house energy. If there is right competition then many of consumer will get solar panels.
This solar panels energy is very useful.
In instances like this, I'm glad to know that we have a system in place that allows such dumping to stop via the WTO. International trade could continually fall into a cycle of dumping, high tariffs, restriction of trade, etc. Now with the WTO countries can air grievances and stop things like this from taking places. Sometimes I wonder, though, how effective subsidies can be. If the Government already has the money to fund said subsidy, then it would be effective. However if the government has to raise taxes to fund the subsidy then it would shit the problem back onto the consumer. Just a thought. Good article.
ReplyDeleteAs a student from China, I would like to read such article with respect to China. It is interesting that such trade conflicts issues reflected in different perspectives varies U.S. and China. For instance, Chinese government was intended to preach the unfair of imposing the punitive tariffs aim at China exporters, which resulted in a massive loss in relevant industry, however, along with the political pressure from the relevant industrial lobby, the U.S. government was trying to please their potential voters, which might lead to the consumers suffering from a higher price of solar panel.
ReplyDeleteThis is a very interesting article and topic. I have never really heard about this issue before now. Being a consumer I would obviously be against the tariff because as you discussed this puts all of the pressure on us. A subsidy may be a better option but I think that government spending is already a problem and something that does bot need to be expanded in America because it could lead to more debt or a raise in taxes. I think the best way to solve this issue would be to have the WTO work it out some way without putting all the pressure on the US government.
ReplyDeleteIt's frustrating to know that as consumers we are taken advantage of by policy makers. Tariffs and subsidies obviously have economic benefits and losses, but those reasons aren't necessarily why policy is made. When implementing a tariff it always has a political reason linked with it. Policy makers are more worried about securing their own markets to gain some kind of power. If politics were left out of economic decisions then it would be easy to have free trade, but countries are always trying to have the upper hand causing, in this instance, consumers to lose by implementing a tariff.
ReplyDeleteWhen you read articles such as this, and see the way America has responded you really start to question why these decisions are being made. What benefit does the United States gain from imposing such a tariff, if only domestic consumers are going to be hurt? It seems silly that the American government would impose such a tariff knowing which parties would be negatively effected. Is it possible that the tariff is imposed just to make Germany and SolarWorld happy? Most likely this is the case, and it is a shame that the American consumers are getting punished for this disagreement.
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