Economist Mike Walden: The Solar Panel Debate

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?

  1. Tariff is a tax on an imported product
  2. So increases the price of an imported product but not the price of its domestically made counterpart
  3. Administration said China was cheating on production and sale of solar panels – meaning selling under cost to drive out competing producers
  4. Many Europeans have said the same thing
  5. Impact will be to possibly increase domestic production of the panels
  6. But ironically, if domestic version carries higher price than foreign version before the tariff, may reduce consumer purchases of the panels
  7. And if panel purchases drop, installation will drop, and installation is where the big employment is