Friday, May 18, 2012

Raising Tariffs

The local NPR station ran a story this morning that the US has dropped a 31 % tariff on Chinese-made solar panels. As you might expect, this has China furious, seeing as how they're the biggest producer of solar technology in the world. Chinese officials are already threatening that the move by the US Department of Commerce will be a major detriment to world trade.

What does a 31% tariff on solar panels mean? Well, it means that Chinese imports will be that much more expensive in the US. It means that US-made products will be more competitively priced, and it means that US industry will be helped along in becoming a more reasonable maker for solar panel products.

This is a debate that has been a major, if silent, player for America for decades: free trade vs. fair trade. While Free Trade agreements like the one's we have with China (and recently some South American countries) give us the benefit of cheap, plentiful goods to fill the shelves at Wal-Mart's everywhere, the downside is that it strangles our own industry. American citizens are not in the habit of buying significantly more expensive products because they are made in America. Solar panels and other cutting edge technologies are much cheaper as imports than domestically constructed products. Tariffs help to level the playing field, and set a precedent for future trade with China and the rest of the world.

This new move by the US government means that domestic solar companies will be able to market their products more competitively. Right now, China is developing a monopoly on solar technology. Like most advanced technology, China is able to develop solar panels cheaper, faster, and better than any other country. They have the worker capacity to continue growing in the field of renewable energy until they are the only game in town. Naturally, the US wants to get into the game, and this tariff is the way to do it.

Consider Solyndra, that company that Repubs are always trying to turn into a thorn for Obama. The reason Solyndra, a solar panel construction company, went under is that they couldn't compete with Chinese imports for cost. America is woefully behind in our research and development of energy technologies, and funding for that research is being funneled primarily into oil and natural gas projects. So, that leaves the technology of the future in the hands of China, our biggest competitor in the world markets.

I, for one, believe this tariff will be a huge boon for American industry. We need a little more economic isolation and self-reliance. We import more than any other country. We need to invest in ourselves, not in the industries of other countries. If we can impose a tariff on things like solar panels, that gives our own industry an edge, and the chance to make money, expand, and help our domestic economy. It's a win-win for the US.

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