At the request of domestic solar energy industry, U.S Department of Commerce opened “anti dumping and anti subsidy Case” to regulate an influx of Chinese Solar Panels that had been imported to the United States. Department of Commerce plans to impose anti-dumping tariff that would range from 50 percent to 250 per solar panel imported, and it is also considering to put additional 100% tariff to give extra protection against subsidization. Because the chance of Chinese manufacturers winning the case is substantially low, they has been seeking alternative strategy in their production process. They are preparing to manufacture their product through different supply chain–South Korea and Taiwan–to avoid tariffs, but this strategy is unlikely to let them get away with it. Thus Chinese government is now planning to express its frustration through regulating U.S Poly-silicon, the main material used to produce solar energy.
I think both countries decisions are flawed. In the perspective of economics, U.S government is generating massive amount of “Dead Weight Loss”, by reducing market’s incentive to buy and sell. Chinese government’s decision is flawed as well; By regulating poly-silicon, it would now have to produce its own, which China is unable to do without bearing enormous opportunity coast.
Source:Davegrandlund Cartoon
Original Article: http://www.nytimes.com/2011/11/22/business/global/china-bends-to-us-complaint-on-solar-panels-but-also-plans-retaliation.html?pagewanted=1&ref=business
Do you see the tariffs having any positive impact at all for the country?
For the United States, Tariff will protect domestic producers of cells in the United States.
Nevertheless, for China, tariff can not produce any positive effect.