U.S. may put emergency tariffs on solar imports | Hacker News Reader

U.S. may put emergency tariffs on solar imports

reuters.com

44 pointslumberjack75 comments

I wonder to what degree this is motivated by an attempt to stifle the expansion of renewable energy. I sometimes get the impression that the "conservative" position has morphed from "cheap energy is good for the economy" to "Coal power, even if it's more expensive than solar or wind, just to annoy the environmentalists".

Note that this isn't about "dumping" (selling below costs), but a much weaker WTO provision allowing to temporarily slow down the pace of change to allow the domestic industry to adapt.

It's not because they want to annoy environmentalists, the republican party just receives a massive amount of campaign funding and lobbying from the oil industry. They do stuff like this and deny climate change because if they don't they'll lose a significant chunk of campaign funding and the oil Giants will just back another candidate in the primary. Democrats are guilty of this too, but oil primarily goes after Republicans.

Also interesting/telling: all of a sudden the republicans are against "free market" trade here.

>all of sudden

US politicians have been awful about this for a long time. We have tarrifs on an embarassing number of things from cheese to sneakers to auto parts... While we scold and bully other countries for their own protectionists policies and tell them to 'do as I day, not as I do,' and open their borders.

American conservatism has morphed in to just doing whatever pisses off liberals, even if it's foolish.

https://en.wikipedia.org/wiki/Rolling_coal

Wow, I did learn something today.

"Rolling coal is a form of conspicuous air pollution, for entertainment or for protest."

Not without precedent. Salting the earth?

That was done for military strategic purposes, not simply for the lulz.

It probably only really happened for the lulz, as a ceremonial curse.

They didn't have (literal) tons of salt to waste on spite.

Symbolically destroying small amounts of resources and depriving yourself and family of a clean environment to essentially complain. Hmm maybe scorched earth is the better description of whats going on here? Salting the earth is done by the aggressor, scorching the earth is done by the retreating party. I think it still fits.

There are quite a few youtube videos of people leaving a Prius in a cloud of black smoke. That conservatives find this amusing is just horrific.

The Obama administration was pro-solar, so the GOP had to be, has been, anti-solar. Remember the Solyndra "scandal." It's not about "annoying the environmentalists" per see, it's about motivating those voters who do get revved up about annoying the environmentalists.

That's certainly not the only reason but it would be naïve to wave it away at this point. As the article points out, the situation we find ourselves in has been years in the making. US PV production has actually been in decline just as PV is starting to make sense.

>Remember the Solyndra "scandal"

The rest of your comment rings true with me. Why the quotes on scandal though? It certainly didn't work out well for taxpayers. Half a billion in government loan guarantees gone.

Edit: Politics aside, Solyndra falsified information on their loan application, were raided by the FBI, and skewered in an IG report. It sounds like a scandal just on their part alone.

500m is 0.008% of the 6.5 trillion unaccounted for at the pentagon[0]. Why did we make such a big deal out of Solyndra, while overlooking a problem about 3 orders of magnitude larger? I think the scare quotes are warranted. Solyndra was only a big deal because a Democratic administration did it.

[0]: http://www.reuters.com/investigates/pentagon/#article/part2

Trying to leave politics out of it. The FBI raid, and IG report seem to indicate "scandal" is fair. That is, on Solyndra's part.

Overall, it's actually worked out very well for taxpayers. The program that provided the Solyndra loans has made billions of dollars for the government, with a very low loss ratio:

https://www.bloomberg.com/news/articles/2016-11-28/trump-can...

Ugh. They did this with aluminum extrusions and it was irritating. Chinese factories are happy to do low-volume runs and customization where the US factories don't want to talk to you unless you're a big fish. So it ended up blocking some sales altogether, versus the intended effect of more sales to US companies.

I can see this having a similar effect.

It was not just irritating, the WTO fined U.S. and EU retaliated with their own tariffs. U.S. was the loser in the end.

Then why not start a business that does low-volume runs? I don't see why we should allow the export of all of our industries just to maximize profits for the business owners.

Edit: To those who downvoted me, can you please explain why? I'm asking a serious question. There are plenty of small solar production businesses in America at the moment, this idea is totally possible.

Good question! In this case, the Chinese government is heavily subsidizing their solar industry. The only way for us to compete would be for us to heavily subsidize our own solar industry, but what is the likelihood of that happening?

As a business owner, attempting to circumvent a nation state economically is painful.

Or we could accept their generous gift of a subsidy for our solar equipment supplies and benefit from increased employment and development in our solar panel consuming sectors. Thanks very much China!

Agreed! Let China make the panels, while we use local labor to install them.

Protectionism has it places; solar manufacturing is not one of them.

Solar installation is probably, like most other installation jobs, a race to the bottom with regards to profit. Not to mention that installation is more-or-less a one-time event per house - where do those employees go once you've passed the initial hump?

There's much more money (and sustainable jobs) to be had in the creation of the solar cells.

Building houses is a one-time event per lot. Where do those employees go once you've passed the initial hump?

That's why there's a relatively small number of people constantly employed by building houses, and the profit made by individual contractors is relatively small. And with the continued streamlining of the process, fewer and fewer people can get constant employment from the housing industry.

There are a lot of roofs left in the US to install solar on.

Building houses is a "more-or-less one-time event" too by your logic. I don't see the construction industry evaporating any time soon.

In addition, as someone else said, there's a LOT of roofs left to install solar on.

On top of those factors, these systems will surely need some amount of maintenance and repair; the installation companies can do that too, since they're already experts on that particular hardware.

On top of that, solar panels degrade with age, and newer panels are technically superior, so just like people replace cars after using them a certain amount of time, people are going to replace their solar panels eventually (though it may be 25 years), so there's also going to be business in upgrades.

It's not evaporating, but there's not a lot of profit in it for the individual contractors, nor are there a lot of people employed.

And as solar installation continues down the "shingling the roof" - there's already an industry in place to take care of that.

If we want solar to sustainably employ a lot of people, installation alone is not the way to do it.

Commercial construction sustainably employs a lot of people (and commercial buildings last a minimum of 50 years). HVAC installation and repair sustainably employs a lot of people. Roofing sustainably employs a lot of people (and shingle roofs typically last 20-30 years).

I can name lots of other industries just like this. You're just spouting nonsense, or you have unreasonable expectations. If you're expecting solar to employ gigantic swaths of people in this country, you're being unreasonable; you don't expect that of HVAC or shingle roofs or just about any other industry, so why would you expect this of solar?

Huh? As a potential buyer of short run, low volume extrusions I should start my own aluminum processing plant?

Of course. On HN, every problem you encounter is a market opportunity, and someone who has ever encountered a particular problem should immediately drop what they're doing and start a business to take advantage of it.

And then you're going to run into some red-tape, which means you should drop your aluminium business to create a SaaS startup that disrupts government bureaucracy for people starting manufacturing plants. And then you run into some inefficiency with your framework, so you drop your SaaS and build a new web framework that helps people more efficiently build SaaS solutions for clearing government bureaucracy when they're trying to start an aluminum smelting business.

Alum.js. You guys can have that one for free.

free marketeers are idiots...

Would you please stop posting uncivil and/or unsubstantive comments to HN? You've done a lot of this, and we eventually ban such accounts.

Why don't you do it yourself, you already have 1 person interested which is a much better position than parent.

Being ready to buy something is orthogonal to being capable to create a business selling it. Not everything has a low hanging scratch your own itch as in open source software development (and even there)

Seems like a terrible idea to me to base your new business on tariffs that might not survive beyond the next administration. Then you're stuck competing with low price Chinese again.

This seems to be the stereotypical answer to every problem in the tech world: just do it yourself. If you want it so bad, do it yourself! Want a change to Linux? It's open source, do it yourself! Want better IOT security? Raspberry Pi is cheap, do it yourself! Want low-cost low-volume runs of high quality aluminum? Start your own foundry!

Does no one ever see how ridiculous they sound when they say things like that?

Extruding aluminum (making solar cells, etc.) requires a significant investment up front for the appropriate equipment (can't just be 3D printed or easily milled). Throw in the very real possibility that you will then be immediately undercut by the established players - what's the justification for that initial investment?

Sure, it's good for the consumers in the long run (assuming the established players don't just resume their regular playbook once the upstart has been crushed), but who is going to invest money in such a poor risk?

> ...just to maximize profits for the business owners

Cheaper is not what business owners want. Cheaper is what customers want!

Ah no business owners want cheap labour and other cheap inputs. The problem with tariffs on solar is not going to help it is just moving the pain from the manufacturers to resellers and end consumers. Which in the long run would be bad for everyone. The only real way out of this is innovation to bring down costs. All the wars for oil by the US didn't give it energy security it wanted but innovating ways to get oil out of shale cheaply has brought OPEC to its knees.

> To those who downvoted me, can you please explain why?

Sure thing. "Then why not start a business that does low-volume runs?" is not helpful. OP is likely in a different business, and starting a resource and capital intense business just to do low volume runs is likely not part of their roadmap for the next 5 years. It's also far from trivial.

Put differently: Given how easy you make it sound, where's the "Show HN" about your lifestyle business offering such services?

99% of the time chasing small fish when everyone else is chasing big fish, your going to starve or barely survive. because of costs to acquire customers.

Unless, you happen to be on the cusp of a disruptive technology change.

This hasn't been my experience. Perhaps the difference is that my end goal is just to live comfortably? I interact with a lot of people that, like me, do well in a niche spot. No aspirations to change the world...just content to be my own boss.

I was talking about customer size not markets. Nothing wrong with finding niches.

Also, nothing wrong with chasing any customer at first just to get revenue coming in.

Economics keeps confusing me. Is this not the very goal of international trade? If someone else is better or cheaper at producing specific goods or services, then you import them, let your industry die, and move the people to a different industry. At least unless the other country is just trying to kill your industry with subsidies or something along that line only the gain market dominance and raise prices later.

What if a country has more buying power than others but is not the most efficient at manufacturing. Should that country simply ship off all jobs?

Is this actually possible and sustainable? Where would the money come from to buy everything if you are not producing anything at a price that others would be willing to pay?

All jobs are in manufacturing? Really? What is it that you manufacture?

I believe that's how free trade works. US has dominated in technology due to the same effect.

But the most important part is when a country chooses to not specialize in something, they have the ability to specialize in something else. US has to decide whether the opportunity cost of getting manufacturing back is worth it, given it won't be a very employable area with all the automation.

How did they get the buying power in the first place?

Jobs of some sort. Teachers, construction workers, health care workers, programmers. Farmers, utility workers, electricians and craftsmen of different sorts. Case workers for the country's child protection agency. Folks that speak the local language who work in call centers. Sure, some of these are low-paying jobs, but lets face it: so are some factory jobs (i've worked in one and had friend that worked in others, which pay a little above minimum wage).

Simply put, you aren't going to ship off all the jobs. So they aren't the best at manufacturing? So what? Obviously, if they have buying power, the country has some other strengths. They simply wouldn't show up when looking at manufacturing only.

Most of the jobs you're talking about are absolutely useless to people in foreign nations. People in China don't care about your child protection case workers, health care workers, utility workers, construction workers, and teachers, because they have zero effect on their economy. What incentive is there for people in China to manufacture stuff and send it to your country if you have absolutely nothing to offer in return for trade? International trade only works when you have stuff to trade; you can't run an economy based on consumption only, and have the rest of the world working hard to provide you stuff to consume. That "buying power" comes from your nation exporting something, whether it's manufactured goods, specialized services, etc. Otherwise, it's eventually going to fall apart. What does the US export?

This is pretty well understood, viz the Law of Comparative Advantage [1]. This doesn't tell us that you have to be the cheapest in the world, only that you should specialize in whatever you can do most efficiently. If your trade partners do the same, everyone wins. If they don't do the same, then they are causing themselves to lose out.

[1] https://en.wikipedia.org/wiki/Comparative_advantage

But if you are unable to or stop being able to produce anything appealing to the world market, then you are loosing and opening your market is a really a bad idea.

No, that's not the case.

Imagine a simple world with two countries (1 and 2) and two commodities (A and B). It might be that country 1 has something that allows them to produce both A and B with greater efficiency than can 2. But even when that's the case, they (and the whole world) do better when they continue to concentrate on producing the one for which they have the greatest advantage (say, A). Even if 1 can also produce B more efficiently than can 2, it works out better if they ignore that, leaving it to 2, and just concentrate on producing all the A they can.

That solution doesn't change if there are more countries and more commodities. It might make the big picture more complicated, but it remains a better solution for both 2 and for the entire world if 2 concentrates on producing whatever it's best at.

(Note that this is purely based on economics of commodities, and not national security. When some of those commodities are things like "missiles", it may well be that a country things they need to have a guaranteed secure supply, should one of their trading partners decide not to be friends anymore.)

I don't think that is true, at least not generally. In the extrem case, if 1 can produce A and B at zero costs, why would it be better if 2 produced anything assuming that the costs are non-zero for A and B? And I see no obvious reason why that would change if we go from zero to small non-zero costs. It might be true if there is an unlimited demand for at least one of the goods and we simply fully utilize the production capacities of 1 and 2 but that is not a realistic scenario in general. And even then I don't think it would be true in general. What if 2 could not satisfy the demand for B?

Yes and no. The specific provision is meant to allow governments to ease sudden shifts. As an example, say the weather in some country Y was extraordinarily great for growing tulips this year. As a result, they're exporting enormous amounts of tulips, at really cheap prices. Nobody is buying durch tulips this year, because they're more expensive. All dutch tulip farmer ("tulipers"?) will go bankrupt, because np business can survive a full year with no revenue and full costs. When next year comes around, the weather in country Y is back to normal, but the dutch tulip industry has been shattered.

Which raises the question which unforeseen temporary changes are supposed to be at play here.

They're not unforeseen, China is giving subsidies for solar panel manufacturers. Not many people object to using subsidies for domestic industries or R&D but using them for exports is just state level predatory pricing.

That's a pretty aggressive stance government intervention. I'm all for government intervention when it is needed, but honestly your example ignores the fact that: farmers actually solved this problem ages ago, and yes on the free market, by using futures contracts and other financial insurance to manage their finances.

This leads me to two questions:

Has there ever been a situation where temporary conditions in some country (like Country Y) led them to satisfying worldwide demand? It seems that even in a year where foreign competition was strong, domestic producers would be able to find SOME revenue for their goods.

What would stop the industry from rebuilding the following year? Supplies have dropped as foreign production decreased, and the demand (presumably) has remained the same. The human and natural resources and infrastructure couldn't have changed all that much in the course of the year.

It seems to me that a few enterprising tulip producers would be able to recognize the 1-year aberration, find a way to weather the storm, and expand their market share the following year against reduced domestic competition.

1) You might run out of industries to move people to, and shutting down old industries and setting up new ones is expensive.

2) You become dependent on the countries you're importing from. See Russia's fear of Intel chips, various embargoes, etc.

There's value in maintaining a manufacturing base at home, because there's often a lot of high tech expertise and knowledge of processes that are otherwise lost. If the Chinese suddenly decide to stop subsidizing their solar industry and they can pump up prices because every other country has decided to let the Chinese manufacture all the panels...Well, it won't be pleasant.

Sure, that's the globalization ideal. But in the real world, there are a bunch of other non-market factors at play, which these kinds of policies attempt to account for:

- The low-cost remote industry may not be sustainable. It would be unwise to allow upheaval locally for what could turn out to be a short term gain (for example selling your city buses and firing the drivers because Uber is a thing).

- The industry may not be able to scale particularly well. This is why milk production is heavily regulated in Ontario—it keeps the price steady and avoids boom and bust cycles which would hurt both the consumer and producer.

- There's a non-zero cost to having the local industry fold; specialized machinery is written down and sold for scrap, entities (and sometime individuals) go bankrupt, people are out of work, etc.

- There can be sovereignty issues with being overly dependent on a foreign power for some critical resource, for example oil, food, energy.

- The cost of shipping is an unknown in the long term. Flying in produce from far away makes sense when airplanes and fossil fuel are cheap, but do we want to build our society on an assumption that that will be true indefinitely?

While at the same time increasing subsidies for coal and oil? Good luck getting that passed the ITC.

They subsided solar as well. It's probably the reason why no one could make a profit in solar energy. Too many small companies competing over a small share of the energy market.

Cool, trade wars. I was wondering when Trump would do something stupid that impacts the markets.

Trump hasn't done anything yet here. Let me read the article for you:

Under WTO rules, such temporary tariffs may be used to shield an industry from a sudden, unforeseen and damaging surge in imports. They can be challenged by other WTO members.

The ITC will decide by Sept. 22 whether the U.S. industry has suffered "serious injury", and if that is the case it will submit its report to Trump by Nov. 13, the filing said.

Don't get me wrong: Trump is terrible on trade, and I fully expect him to act in ways that are self-destructive to the USA (and to do so with full support of the GOP and the DEMs). But let's be intellectually honest, and recognize that this isn't yet him doing that.

I did read it, thanks, and the title makes that clear too.

Maybe a silly question, but will tariffs on imported solar products lead to increases in prices on domestic solar products?

How does the President play a role in any of this?

US company can profitably make and sell widgets for $98 each. Chinese company sells them for $80. President imposes a 25% tax on widget imports, raising the Chinese price after import tax to $100. US company sales surge.

Other US company that uses widgets in their manufacture of other product for export wail and gnash teeth that now their exports are uncompetitive. (Or US company that issues widgets to staff to enable providing services have to cut back, have layoffs, etc).

There may also be some anomalies depending on how it's implemented. These tariffs can sometimes be a bit ham-handed. For example, I can see a situation where tiny solar cells not meant to be targeted are swept up in the tariffs.

The tariffs would be imposed by the Department of Commerce which takes policy direction directly from the President.

(the department also gives advice, but the authority and responsibility ultimately rest with the President)

He appoints the regulatory reps that are alligned with his policies. Add personal dynamics and diplomacy and you have a rather big role.

Emergency? What's the emergency, cheap renewable power?

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