Any day now, President Trump is expected to decide whether to punish China with tariffs on cheap solar cells and panels it exports to America.
For a president who raged against China during the presidential campaign, calling its mounting trade deficit with the United States "the greatest theft in the history of the world," it might be tempting to finally substitute action for rhetoric. But a decision to slap big import taxes on the Chinese-made solar parts would be a serious mistake, one likely to kill far more American jobs than it saves.
Artificially raising prices on imported solar cells and panels would hurt a burgeoning domestic solar industry that employs the kind of "forgotten" Americans whom Trump champions: small contractors who employ blue-collar workers earning a median of $26 an hour; one in 10 are veterans.
Tariffs would also stifle a rising sector generating the cleanest of energies.
Without question, in certain manufacturing industries, American job loss has been a tragic consequence of globalization. The solar case is just one of several major trade rulings pending in the Trump administration. But in this particular case, there are two very different sides to the story.
On one side are manufacturers SolarWorld, a U.S. subsidiary of a German company, and Georgia-based Suniva, majority-owned by a Hong Kong firm. Both complained to the U.S. International Trade Commission (ITC) that cheap imports, mostly from China, were killing them. Suniva and the SolarWorld parent company are in bankruptcy proceedings.
They filed their ITC complaint under a seldom-used statute in which the criteria is nearly impossible to refute. Commissioners needed only to find that large numbers of an imported product were undercutting a U.S. manufacturer.
On the other side is the ever expanding American industry that assembles and installs solar panels for homeowners, commercial projects and solar farms. They include companies such as Tesla, which opened a new factory in Buffalo, N.Y., last month where 500 workers fashion solar panels using the low-cost imports. (Tesla, while it opposes tariffs, says it could absorb the higher product costs.)
And it would likely be crippled if Trump imposed a tariff requested by SolarWorld and Suniva that would double the price of imported solar panels. The trade commission balked at such a stiff trade barrier and recommended lesser tariffs of up to 35%.
While jobs at risk for the two manufacturers number in the hundreds, the assembly and installation sector could risk losing as many as 88,000 workers. That includes well over 10,000 jobs in states that went big for Trump: South Carolina, North Carolina, Georgia and Florida.
Even Trade Commissioner Meredith Broadbent, despite joining with other ITC members in finding for the petitioners, acknowledged that any gain in manufacturing jobs would be offset by larger losses elsewhere in the solar industry.
This, Broadbent said, "would have devastating effects for many of the small firms and construction workers engaged in residential installations." She broke with the other three commissioners in urging Trump to impose a quota on imports, rather than tariffs, equal to the current level coming into the country.
That could be one way to go. Another would be to do nothing. Just the threat of tariffs has created enough uncertainty for the cancellation of solar panel projects.
If China wants to subsidize the greening of America's power grid, so be it.
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