The President of the United States Donald Trump signed into law a steep tariff on imported solar panels and washing machine on Tuesday, Reuters reported. The move, which is being seen as a protectionist policy, was, hours later, labelled “worrisome” by Prime Minister Narendra Modi at the World Economic Forum. China, too, issued sharp rebuke in response to the decision, saying it “aggravated the global trade environment”, CNN reported.
While the US government maintained that the bill was a way to protect American jobs, the solar industry said it would lead to thousands of layoffs and raise consumer prices, also pushing China, which may also push China in a corner. The US accounts for 18% of the total Chinese exports market.
The 30 percent tariff on solar panels is among the first unilateral trade restrictions imposed by the administration as part of a broader protectionist agenda to help U.S. manufacturers, but which has alarmed Asian trading partners that produce lower cost goods. The administration also introduced a tariff on imported washing machines, Reuters reported.
China has been world’s biggest supplier of solar panels and also accused of heavily subsidising the product to help manufacturers keep the price low. According to the US General Administration of Customs, if a 45% tariff is imposed, some economists predict that it would halve or worse of Chinese exports to the US, CNN reported.
China’s Ministry of Industry and Information Technology (MIIT), too, flagged concerns over hike in tariff, saying that the outlook for overseas expansion by Chinese solar companies is not optimistic due to frequent trade disputes, Reuters reported.
“China’s solar industry has been growing at a fast pace in recent years, making itself a target of protectionism in some countries,” the MIIT said, adding the disputes have hindered Chinese solar companies from expanding overseas and would add to the costs in the global solar market.
China, the world’s biggest solar panel maker, produced a total of 68 gigawatts(GW) of solar photo-voltaic cells and 76 GW of solar modules in 2017, up 33.3 percent and 31.7 percent respectively compared to a year ago, data from the MIIT showed.
