Policy Flash: New US Tariffs

March 7, 2018

New Import Tariffs
On 22 January 2018, U.S. President Donald Trump announced tariffs on imports of washing machines and solar energy cells and panels. The Trump Administration defended these measures as the first concrete action of the trade policy defended by President Trump since his election. The opposition is concerned that this will limit choices for American consumers and raise domestic prices.
 
Background
Whirpool Inc., as well as two solar companies, Suiva Inc. and SolarWorld Americas, had asked the White House to curb imports competitor’s projects from foreign companies. The U.S. President’s actions are based on a “little-used section of trade law that provides a safeguard for industries beset by imports—and which casts a wide net on products from around the world”. (New York Times)

President George W. Bush’s attempt to utilize this law in 2002 on steel imports was later struck down by the WTO and the Bush administration withdrew their measure. China and South Korea both suggested they may take complaints in regards to these new tariffs to the World Trade Organization as well.

Future Ramifications
More protectionist policies could be announced in the coming weeks as White House advisers warned that “additional trade measures related to steel, aluminum and other products from China” may be coming soon, including measures related to intellectual property rights (NYT). However, at this stage, nothing indicates that similar protectionist measures will be implemented outside these specific domains.

President Donald Trump should share more information on U.S. trade policy during his speech in Davos and at the State of the Union on January 30th. You can read more about expected changes to U.S. trade policy here.

Read more here: The New York TimesReutersPOLITICO