Will US Regulators See the Light? US Solar Panel Manufacturers Seek Protection From Unfair China Trade Policies

Today I noticed this article during my daily scan of the news:

http://www.bendbulletin.com/article/20111020/NEWS0107/110200363/

In short, seven domestic solar panel manufacturers filed a trade case with the Commerce Department accusing China of subsidizing its own panel manufacturers to an unfair degree. In some cases the subsidies are enough to allow Chinese panel producers to sell at prices that would normally incur a loss. The clear long term strategy is to give Chinese panels a huge price advantage long enough to put all their competitors out of business. This is not just conjecture. The practice is already well documented in the rare earth metal industry where the Chinese control an estimated 95% of production and can now set prices because they have a monopoly. Rare earth metals are important in a variety of industries, especially electronics such as cell phones. They are also used in catalytic converters on automobiles and in the magnets found in wind turbines.

To remedy the situation the complaint is asking the Treasury department to impose a 100% tariff on imports of Chinese panels. The idea of a tariff is appealing because in addition to removing unfair competition from China it has the added bonus of generating revenue which the government sorely needs right now.

One point the article makes is that if tariffs are imposed the cost of solar panels in this country will go up. This is true. One budget neutral way to address this would be to eliminate all subsidies for the oil, coal and gas companies. These large corporations are doing fine on their own, making billions in profits in recent years. Subsidizing energy from these unsustainable sources just fattens the profits for these companies at taxpayer expense. Theoretically they also make these sources cheaper, artificially widening the gap between the price for renewable vs. unsustainable fossil fuel sources.

Instead the money should be used to offer rebates to homes and businesses who choose to install US made panels, helping offset the the fact that panels made here cost a bit more. As US production grows it should be possible to achieve the economies of scale that are the other reason why Chinese panels are cheaper.

Asking Amazon.com to tell me where it's made.

Dear Amazon,

Mounting evidence has led me to believe that many of the economic problems being faced in the economy of the US are the result of the outsourcing of US jobs. I want to make purchases from as many American companies as I can so that I can keep myself, my family, friends and fellow citizens employed and productive. The most basic part of that choice is the ability to determine where a product was made. In conventional stores it is fairly easy to look at the label for the country of origin.

Recently I was shopping for a backpack and saw a link to your site. I like amazon.com - your website is very easy to use, seems secure and has a good selection of products at reasonable prices. In this case though, I chose not to buy the product because I could not determine where it came from. As an amazon customer I would be much more likely to use your site and make purchases if your company could somehow prominently display where each item is manufactured or even enable your search tool to filter results based on that criterion.

Thanks for reading. I look forward to many future purchases of American made goods through your website.

Sincerely,

Michael L

To bee or not to bee..

That is the question now being faced by American beekeepers. The answer to that question is largely in your hands.

To summarize an article I recently read in the Globe and Mail, China is the largest global exporter of honey. The standards for the production of this honey are, not surprisingly, lower than here in the US. Chinese beekeepers are allowed to use a type of antibiotic which has been shown to contaminate the honey itself. The antibiotic is banned from use in the US. Honey processors also take a turn, sometimes diluting the honey, sometimes using cheaper high fructose corn syrup to cut it but maintain sweetness. US authorities are aware of these practices and have imposed tariffs and import requirements on Chinese honey. Since then imports from other Asian countries have surged at unprecedented rates. This indicates that through methods of varying legality Chinese honey is in effect being laundered and then re-exported to the US under the label of a different nation to circumvent the tariff.

I highly encourage you to read the whole text here:
Link

This article shows the limitations of tariffs for regulating trade. In many cases, tariffs are desirable. They are a tool that can help to protect US industry from foreign firms that receive subsidies designed to bankrupt rivals or that aren't legally held to the same standards of quality and safety as companies in the US. The bottom line truth is that this inferior honey is being sold to us because there is a demand. Regardless of whatever -isms govern the US and China, the fact remains that where there is strong enough demand, a market will emerge whether it is wanted or not. That is the simultaneous beauty and horror of the free market- it is very effective and efficient at providing goods and services to those who want them the most. If you have the money you will get what you wish for, so be be careful as the saying advises. In this case the American consumer is asking for a jar of yellow sticky stuff labeled honey, the cheaper the better, regardless of the implications of what is (or isn't) on the label.

Ignorance is part of the problem - if customers don't know a product is tainted or that important corners are being cut to make it, they can't change their behavior. One goal of my blog is to promote awareness of issues just like this so people can make better informed choices. You can help by telling your family and friends. You can also help spread awareness by sharing my blog, so consider linking to this article through your facebook. Its easy, just click on the facebook icon below.