How One New Tariff Could Cost You $5,000 This Year
By Joe Jarvis - January 27, 2018

American companies actually want to stay in America now!

The corporate tax cut in the new tax law is a big deal. The top rate went from 35% down to 21% flat, across the board. I hate taxes in general, but that reduction is nothing to shake a stick at. It makes America competitive for businesses, and you know how I love to talk about the competition among governments.

Okay, so it seems we have a federal government in place that actually understands economics. After all, Trump is a billionaire businessman! He totally gets how-

Annnd he just applied tariffs to some foreign goods. Sigh.

The tariff applies a 30% charge on imported solar panels, and 50% on large residential washing machines.

It is tempting to say, oh well at least that will help American manufacturers. And indeed, the tariff was applied with nationalist protectionism in mind.

The tariff was imposed at the request of two domestic solar panel manufacturers, Suniva and SolarWorld, which have been struggling recently against cheap solar panels coming from China. The tariff, recommended by the bipartisan U.S. International Trade Commission, is designed to help these companies compete for the domestic solar market.

But that doesn’t mean the tariff is good for the American solar industry as a whole, nor the American people, nor American businesses.

The average solar setup on a house costs $16,800. A 30% increase in this cost adds $5,040.

Obviously, this makes the cost of solar energy rise. And when considering solar, people base their decisions largely on cost savings. Five grand is a huge sum to overcome.

Rising costs suppress demand. This will hurt American solar companies which use foreign panels. And it turns out, making the panels accounts for a tiny minority of American manufacturing jobs in the solar industry.

Panel manufacturers, the beneficiaries of this new tariff, make up a small part of the overall solar industry. An analysis by the Solar Energy Industries Association (SEIA) estimated that the solar industry employed approximately 38,000 people in manufacturing jobs in 2016, and only 2,000 of those manufactured panels. The other 36,000 workers built mounting systems, inverters, tracking systems, and other auxiliary hardware.

And the tariff phases out after 3 years! You probably won’t save $5,000 in energy costs in three years with solar panels. So you might as well wait until the tariff expires.

This won’t help American solar companies, it will just make people delay installing solar. This could end up slaughtering the entire solar industry. It almost makes you wonder if the real reason is to protect coal and oil energy producers.

“The president’s action makes clear again that the Trump administration will always defend American workers, farmers, ranchers, and businesses in this regard,” U.S. Trade Representative Robert Lighthizer said in a statement announcing the decision.

Absurd! This hurts every American who wants a choice in energy.

This hurts any American who wants to be energy independent instead of relying on the grid and power companies.

It hurts Americans employed in every other sector of the solar industry.

And the tariff likely will not even help the couple solar companies it was intended to protect. Their costs won’t decrease, they will only seem competitive by comparison with artificially expensive foreign products.

One of those companies, Suniva, filed for bankruptcy last April. The other, SunWorld, is a German subsidiary.

So Trump is protecting a bankrupt American company, and a German company, while jeoparding tens of thousands of American jobs in the viable solar panel mounting industry.

Tariffs are just another way to mess with the market. And government intervention in the market always makes things worse.

You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

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  • defevve


  • Poppo

    It is a HELL of a lot smarter than giving Solyndra a few million for political favors!

    • Alan777

      I agree. The US government has squandered billions on solar companies and research grants. There’s been some outright fraud as with Solyndra. Other countries like Spain have given huge subsidies to their solar manufacturers. This may be an attempt at a leveling of the playing field and certainly is meant to jumpstart manufacturing in the US. IMO, it being temporary is good.
      BTW, I keep getting offers from solar panel installation companies in MA. Their selling point is the thousands in tax breaks but I refuse because of the government subsidy as a matter of principle.

      • Poppo

        I live in CO, where we have a lot of sunshine. I have good friends who went solar, they say even with tax breaks, etc. it was a big waste.
        I have very little confidence in the tree huggers and global warming alarmists.

        • Alan777

          As a scientist, about 10 years ago I did several years of research and study on “man-made global warming” . My conclusion, was that it was a non issue and only pushed by “political scientists” and those pursuing self interests. There’s been a concerted effort over decades to push this propaganda and the majority of its believers are gullible well intentioned idiots.

  • This is a great analysis of how government meddling in the economy (via tariffs in this instance) is destructive. Nice work!

  • John Hankinson

    “And the tariff phases out after 3 years”. Who says it won’t be renewed then?

  • Carl McWilliams

    I completely support President Trump’s solar tariff on Chinese imports because of the 30% federal solar tax-credit that was extended until 2020. The federal solar tax credit, also known as an investment tax credit
    (ITC), allows you to deduct 30 percent of the cost of installing a
    solar energy system from your federal taxes. The ITC applies to both
    residential and commercial systems, and there is no cap on its value. Thanks to the ITC, the average solar buyer saved over $5,000 on the cost of buying Chinese solar systems in 2017. Why should the Chinese solar guys get the 30% subsidy while dumping their solar panels on American soil at the expense of American solar companies?

  • Quisno Rodonovich

    Tariffs properly applied can keep businesses who have to go up against slave labor equal. so lets change that to Tariffs must be Applied so as to even the market allowing China to sell at representative costs to which they will of course work to make their pamels better as our companies do the same, Now you have a competitive challange.

  • polistra24

    It won’t cost you anything if you buy American. That’s the whole point of a tariff, which you obviously don’t understand.

  • Andrew

    I agree that tariffs were a bad idea, but your math is dead wrong.
    You cite $3.15/watt for solar panels. However the panels are only approx. 1/3 of the cost, with labor and associated equipment covering the other 2/3s. Furthermore, not all imported panels with be assessed the 30% tariff… not even Chinese ones. Read the source evidence and resist citing the first Google result for your silly $3.15/watt panel cost.