U.S. to Impose Tariffs on 'Unfairly Subsidized' Chinese Solar Panels

Posted: Mar 21, 2012 9:39 AM

Barring some strange circumstances, it is almost unfailingly better to purchase goods and services from wherever they're cheapest (regional loyalties, like "Buy American," are self-imposed costs that do nothing to promote prosperity). The less money you spend on one thing, the more money you have to spend on other things, which leads to economic growth. Tariffs are counterproductive to the goal of economic growth, but can be quite successful in fattening the wallets of niche industries (even though, in the long run, everyone is less well off than they'd be otherwise).

Subsidies perform a similarly damaging function -- the politically-motivated government deems certain groups worthy of special financial assistance, at the expense of the taxpayer and to the detriment of the entire economy. Subsidies are "unfair" by definition, but apparently, the Obama administration possesses the august wisdom to provide particular businesses with special treatment, fairly, while China, it would seem, does not. Central planning for we, but not for thee:

NEW YORK (CNNMoney) -- The U.S. Commerce Department announced tariffs on Chinese-made solar panels on Tuesday that it said had benefited from unfair subsidies by Beijing.

The preliminary ruling came in response to a complaint from SolarWorld Industries America, a U.S. manufacturer that is a subsidiary of Germany's SolarWorld. The tariffs were lower than many analysts had predicted, however, boosting shares of Chinese solar-panel makers in Tuesday's trading. ...

Under the ruling, which still needs to be finalized following a review process, Chinese-made panels would be hit with tariffs ranging from 2.9% to 4.7%.

The issue has divided the U.S. solar industry, with some companies complaining that Chinese trade practices are smothering U.S. manufacturers.

Maybe Chinese trade practices are smothering U.S. manufacturers, but the Obama administration convoluting market signals is smothering the U.S. economy. The tariff isn't going to be a huge one, and it's true that China's level of market-distortion is a whole other ball game of "unfairness," but still -- the U.S. has provided the solar industry with plenty of pork over the years, and this is yet another cherry on top of the type of big-government interference that impedes global economic growth.