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Outcry on Trump's solar tariffs continues worldwide

By Chen Weihua in New York and Zhong Nan in Beijing | China Daily USA | Updated: 2018-01-24 16:38

US President Donald Trump, flanked by US Trade Representative Robert Lighthizer, holds up a directive to impose tariffs on imported washing machines after signing it on Tuesday in the Oval Office at the White House. Jonathan Ernst/REUTERS

US lawmakers and the solar industry have joined the Chinese government in opposing President Donald Trump's new tariffs on solar panels and washing machines.

China will defend its legitimate interests with other members of the World Trade Organization after the United States announced tariffs on imported solar panels and washing machines, China's Ministry of Commerce said on Tuesday.

Trump on Tuesday signed two trade actions imposing steep tariffs on washing machines and solar panels, saying the tariffs"demonstrate to the world that the United States won't be taken advantage of anymore."

China expressed its strong dissatisfaction with the US for enacting such a broad measure that it called an abuse of trade remedies.

Wang Hejun, head of the trade remedy and investigation bureau at the Ministry of Commerce, said this decision not only aroused the concerns of many trading partners but is also strongly opposed by many local governments and downstream businesses inside the US that benefit from inexpensive and efficient imported products.

"The US has taken continuous trade remedy measures against imported photovoltaic cells and large washing machines that have fully or even overly protected related industries in the US," he said after the decision was announced by the US on Monday afternoon.

The US government levied tariffs of up to 50 percent on imports of large residential washing machines over three years, and up to 30 percent on solar cells over four years.

"South Korean washing machine makers and Chinese solar cell manufacturers will be heavily affected by the US move," said Ma Yu, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

"Trade remedy measures won't solve difficulties such as out-of-date technologies and high labor and maintenance costs facing domestic industries in the US," he said.

The ministry stressed that the foundation of the international economic recovery is still fragile and requires the concerted efforts and actions of all countries.

The US solar energy industry has decried the Trump decision as killing American jobs. Many US lawmakers have also voiced their opposition.

Senator John McCain, a Republican from Arizona, tweeted on Tuesday that "Trump admin's new protectionist tariffs nothing more than a tax on consumers."

Congressman Lloyd Smucker, a Republican from Pennsylvania, said in a tweet that "this solar tariff decision is misguided."

Ben Sasse, a Republican Senator from Nebraska, said Republicans need to understand that tariffs are a tax on consumers. "Moms and dads shopping on a budget for a new washing machine will pay for this - not big companies," he said in a statement on Tuesday.

Wayne Morrison, a specialist in Asian trade and finance at the Congressional Research Service, said that such actions are a further indicator that the Trump Administration intends to more aggressively utilize US trade remedy laws than previous administrations.

Morrison believes that some might argue that the administration is simply exercising its right to address unfair trade practices (e.g., antidumping and countervailing measures) or to assist US firms negatively impacted by imports (safeguard measures) in the hope of helping US domestic firms compete and inducing other countries to "play by the rules."

But such moves could be viewed by some US trading partners as simple protectionism, and they might respond by initiating similar trade cases against US firms domestically, or bring dispute settlement cases against the US in the WTO, if they think the US has unfairly utilized its trade laws, according to Morrison.

"This could ultimately lead to a series of retaliations and counter-retaliation actions, which could diminish trade between the US and several of its trading partners," he said.

A Bloomberg report on Tuesday said China has plenty of options to retaliate against US tariffs.

"China's economic might gives its government the leverage it needs to strike back decisively, including scaling back purchases of American products and subjecting well-known US companies with large Chinese operations to tax or antitrust probes," Bloomberg said.

Meanwhile, South Korea's trade ministry said it will file a petition with the World Trade Organization over what it called a US violation of WTO provisions, the Yonhap News Agency of South Korea reported on Tuesday.

Samsung and LG - two South Korean manufacturers - exported a combined $1 billion in large residential washing machines to the US in 2016. They held 16 percent and 13 percent, respectively, of a market led by US rival Whirlpool at 38 percent.

That year, South Korean companies also exported $1.3 billion in solar cells to the US, ranking third in the world after Malaysia and China, according to government data.

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