Since the earliest days of his campaign, President Trump has been consistent in his criticism of trade treaties and his desire to get better deals for workers in the United States. Nevertheless, his administration may not have counted on some of the ability of savvy players to use the president's concern to protect the U.S. for their own advantage. Nowhere is this more evident than a recently-launched investigation by the U.S. International Trade Commission into the price of foreign solar energy equipment.
In an unusual twist, the potential imposition of protective tariffs would actually help foreign-owned companies and hurt U.S. workers and consumers.
The request for relief at the ITC came from Suniva, a solar cell manufacturer that was founded in the U.S. but is now majority owned by Shunfeng, a Chinese company. You might imagine there was some irony when the Chinese-owned Suniva declared bankruptcy in April, citing heavily-subsidized, Chinese-made solar panels as a primary reason for its struggles.
The irony only grows, however, when one considers the long history that Suniva itself has in benefitting from government largesse. Suniva has already received roughly $20 million in support from U.S. taxpayers, and has utilized U.S. prison labor to help keep its costs down relative to its competitors. The company also benefitted from a $780,000 taxpayer-funded loan guarantee from the U.S. Export-Import Bank, which Heritage Action labeled "cronyism."
Suniva's dependence on the government could account for its strong ties to Hillary Clinton. From 2009 to 2016, the company paid more than $500,000 to lobbying firm ML Strategies. At the time, the firm's president was David Leiter (a prominent fundraiser for Clinton) whose wife, Tamera Luzatto, had served as Clinton's Senate chief of staff.
While Suniva showed loyalty to Clinton and her supporters, it has rarely done the same for its employees. The Chinese-owned company is currently being sued by its U.S. employees for how it handled mass layoffs in March. Federal law requires companies the size of Suniva to give workers 60 days' notice before mass layoffs or plant closures. According to the lawsuit, Suniva gave workers just one day's notice before being let go.
In response to its own ineffective management, this government-supported, Clinton-allied, and Chinese-owned company is now requesting that Trump impose significant new tariffs on the competition that would double the price of imported solar modules. Suniva was recently joined in this request by SolarWorld, itself a German-owned company.
These tariffs would make the U.S. the world's highest-priced solar country, imposing massive new costs on U.S. companies and families — increasing solar system pricing up to 40 percent for large-scale utility projects, 30 percent for commercial projects and 20 percent for homeowners.
The fact is that even with government intervention and subsidies, the U.S. solar manufacturing industry already has an incredibly small footprint. The industry employs less than 2,000 U.S. workers — imposing massive new tariffs on foreign solar panels is unlikely to change that. However, dramatically hiking up the costs of solar technology will hurt 260,000 U.S. workers who are employed in solar sales and installation.
When it comes to commodities like lumber, steel and aluminum, Trump has been clear in saying that he will pursue the best deals for U.S. workers and taxpayers. But when it comes to solar technology, new tariffs would be a bad deal for the vast majority of Americans.
To date, the Chinese-owned Suniva and the German-owned SolarWorld are the only companies calling for this dramatic intervention that would disrupt the U.S. energy marketplace and push thousands of Americans out of the solar panel sales and installation industry. These companies are just cynical enough to hope that "Putting America First" can be manipulated into to putting U.S. workers last and their own pocketbooks ahead. Maybe a little sunlight is needed so everyone can see what's going on here.
Horace Cooper is a contributor to the Washington Examiner's Beltway Confidential blog. He is co-chair of Project 21 and an adjunct fellow with the National Center for Public Policy Research.
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