Among protectionist measures, the worst are those that not only hamper international trade and hurt economic growth, but also stymie the development of industries crucial to a sustainable global recovery in the long run.
Unfortunately, in spite of the vital importance of green growth, the United States Department of Commerce intends to impose steep tariffs on China-made solar panels. These tariffs put special interests before everything else.This is not good news for green growth, especially as many countries are cutting subsidies for sustainable energy due to their fiscal troubles.
Instead of assessing the impact of Chinese goods on just a single related industry, the US government should take into consideration what these protectionist tariffs will mean to its overall economic future at a time when protectionism is a major threat to the global recovery and countries need to be embracing green growth more aggressively than ever.
Given that the United States still has a chance to overrule the initiative to implement anti-dumping and countervailing duties, the Chinese government has expressed its hope that the US will look at the bigger picture and terminate these trade remedy measures to allow the sector's healthy development.
US-based manufacturers have alleged that government subsidies have helped Chinese firms cut their prices.
But the truth is, as a result of some developed countries promoting the use of solar panels with subsidies and low-cost loans, global research, innovation, and competition have dramatically improved efficiency and lowered production costs for the solar industry, and the industry has grown rapidly in China over the past decade. The fierce domestic competition resulting from overcapacity, weakening overseas demand and competition with traditional fossil fuels, which have become less dear compared to the pre-crisis levels, have prompted Chinese companies to cut prices substantially.
Chinese solar equipment manufacturers should not be blamed for the woes of their US competitors.
By punishing Chinese companies, the US government will not advance the interests of US consumers and its economy.
And rather than helping it lead the way, US protectionism in the solar industry will only make it an obstacle impeding the momentum of the green energy revolution that will definitely shape the world economy in the future.
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