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Trade Wars Are Hard to Win, Part LXXIV

Summary:
Bloomberg: The surge of cheap panels from China dealt a crushing blow to U.S. manufacturers — and Solyndra wasn’t the only casualty. After three other U.S. solar manufacturers sought bankruptcy protection, Obama in 2012 slapped duties as high as 249% on the imports. Manufacturers responded by moving operations out of China, but they didn’t head to the U.S. Instead, large manufacturers skirted the U.S. tariffs by building facilities to assemble solar cells and modules across Southeast Asia. Making matters worse, China retaliated by imposing its own duties of up to 57% on imports of U.S.-made polysilicon — tariffs that crippled U.S. producers of the conductive material used in solar panels. …Before the Chinese tariffs, U.S.-made polysilicon had been shipped to the country and used to produce

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Bloomberg: The surge of cheap panels from China dealt a crushing blow to U.S. manufacturers — and Solyndra wasn’t the only casualty. After three other U.S. solar manufacturers sought bankruptcy protection, Obama in 2012 slapped duties as high as 249% on the imports. Manufacturers responded by moving operations out of China, but they didn’t head to the U.S. Instead, large manufacturers skirted the U.S. tariffs by building facilities to assemble solar cells and modules across Southeast Asia.

Making matters worse, China retaliated by imposing its own duties of up to 57% on imports of U.S.-made polysilicon — tariffs that crippled U.S. producers of the conductive material used in solar panels.

…Before the Chinese tariffs, U.S.-made polysilicon had been shipped to the country and used to produce ingots, the next stage of solar cell manufacturing. But the tariffs made American polysilicon too expensive, Wang said, and the U.S. went from making 50% of the world’s polysilicon in 2007 to less than 5% today.

Tariffs on imports of solar panels were imposed by both the Obama and Trump presidencies and neither succeeded. We would have done better by letting the Chinese subsidize their solar industry and thus our solar energy system and more likely keeping our input suppliers.

Hat tip: Scott Lincicome.

The post Trade Wars Are Hard to Win, Part LXXIV appeared first on Marginal REVOLUTION.

Alex Tabarrok
Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University and a professor of economics at George Mason University. He specializes in patent-system reform, the effectiveness of bounty hunters compared to the police, how judicial elections bias judges, and how local poverty rates impact trial decisions by juries. He also examines methods for increasing the supply of human organs for transplant, the regulation of pharmaceuticals by the FDA, and voting systems.

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