Sometimes it appears that President Obama is getting his feet tangled when he dances around complaints about China. He'll criticize the country's currency policy, but do little to punish it. He'll criticize China's rare earth mineral export restriction, but only encourage other countries to fill the gap.
Now that complaints from a coalition of solar manufacturers have led the Department of Commerce to investigate, the situation is starting to get sticky for solar manufacturing as well. Manufacturing subsidies that, some argue, hurt the fledgling renewable energy industry are becoming blatant enough to be criticized. But I doubt the president would introduce a tariff on solar or wind imports. Like the other issues, it's far more complicated than that.
Tariffs hurt... us
The argument on the surface is easy: China provides subsidies that are costing America jobs, so we should add a tariff to the country's products.
The reality is far more complicated. First off, the U.S. was a net exporter of solar products in 2010, largely selling to China. We sold $1.9 billion more solar products around the world than we bought, driven by capital equipment from GT Advanced Technologies
Subsidies in China have also helped build the capacity that has led to cost reductions and the catering of solar modules in 2011. Low-cost modules have helped build an industry in the U.S. that engineers, installs, and maintains solar projects. This industry currently employs more than 100,000 people and is growing by leaps and bounds. Increasing the cost of this industry's main product isn't exactly a policy I would endorse.
The Brattle Group recently released an analysis that said a 100% tariff on PV cells from China could cost up to 60,000 jobs by 2014. A 50% tariff would result in 15,000 to 50,000 job losses, according to the report. You can see why Obama is dancing carefully around this issue.
A fool's errand
The solar manufacturers' complaints are bringing attention on an international level. Trina Solar
Even U.S.-based companies First Solar
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Fool contributor Travis Hoium owns shares of SunPower in his personal account and an account he manages, as well as shares of First Solar. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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