Although designed to protect American jobs, the new Trump tariffs will have
consequences wider than those intended. The tariff on imported large
residential washing machines is to be 20% on the first 1.2m machines imported,
and then 50% on those above that number. These tariffs will decline to 15%
and 40% respectively in the 4th year. This is designed to protect US companies
such as Whirlpool, but it means that domestic US consumers will have to pay
more for their washing machines because rival products made by Samsung
Electronics and LG electronics will rise in price. It could also hit sales at Sears,
which outsources its Kenmore brand to LG factories.
The tariff on solar panels is to be 30% in the first year, declining to 15% by the
4th year. This will undoubtedly hit America’s booming solar energy industry by
raising its costs. It could add $750 to the cost of fitting out a house, and the
Solar Energy Industries Association estimates it could cost 23,000 US jobs.
Crucially, it will also slow down America’s switch from coal and oil to alternative
and cleaner energy sources. The rapid decline in solar energy costs has been
one of the factors in driving the US to rely more and more on less-polluting
energy generation, and the solar panel tariff will set that back.
In the affected countries, China and South Korea, there will be job losses as an
important export market raises barriers against their goods.
The higher costs to hard-hit American households and the threatened job
losses there are not what the tariffs were intended to achieve. On a wider level,
they raise the prospect of retaliation and a trade war that will cut trade and
economic growth worldwide. The tariffs are not good news.