Recently the Trump Administration imposed significant tariffs on the importing of solar panels to our country. I have three questions about this. First, what are tariffs? Second, why did the administration impose them? And third, what will be the impacts?
- Tariff is a tax on an imported product
- So increases the price of an imported product but not the price of its domestically made counterpart
- Administration said China was cheating on production and sale of solar panels – meaning selling under cost to drive out competing producers
- Many Europeans have said the same thing
- Impact will be to possibly increase domestic production of the panels
- But ironically, if domestic version carries higher price than foreign version before the tariff, may reduce consumer purchases of the panels
- And if panel purchases drop, installation will drop, and installation is where the big employment is