On Tuesday, Donald Trump and his administration announced tariffs of 30 percent on the import of washing machines and solar panels from China.
This development had been expected for some time, since many in the United States had been constantly reminding Trump of his campaign promises. Until now, however, he had limited himself to more or less veiled threats against China, the real bugbear of the American president on the campaign trail. His constant droning about China had struck an ominous note in Beijing, but the Chinese officials had started to believe they had staved off the danger, on account of the Korean crisis.
The tariffs will hit not only China, but also South Korea, which is, in theory, an ally of Washington. (And, as we will see, Mexico has reasons to complain as well.) The Koreans are more than mere allies, in fact; if Tokyo is constantly taken for granted as a friends of the U.S. in Asia, Seoul was always the president’s trump card (as the expression goes). Despite the liberal-democratic presidency of Moon Jae-in, South Korea was still, as ever, a bulwark against China, important both as a client in purchasing weapons and as an economic partner. We should not forget, after all, that Trump’s first act regarding Asia was the sinking of the Trans-Pacific Partnership (TPP) treaty, an economic free trade agreement that would have excluded none other than Beijing.
It was not enough for Trump to have nullified the Obama administration’s efforts at getting Asian countries to say “no” to China. He went a step further: Trumpeting his “America first” campaign slogan, Trump announced a major economic decision that ended up putting Seoul and Beijing on the same side of the fence: Both countries have said they would complain to the World Trade Organization in response to the new protectionist measures.
Trump’s move does more than just make problems for Moon in terms of the regional balance of power. It also makes his life difficult from the perspective of domestic policy, since the new tariffs will do the most damage to the South Korean conglomerates, concentrations of economic and political power that Moon, in theory, was just getting ready to reform.
Specifically, the 30 percent tariffs will, according to the U.S. administration, create at least 100,000 jobs. The measure was strongly supported by Suniva and SolarWorld USA, two manufacturers of solar cells and panels that have both gone bankrupt. But the tariffs, besides displeasing Beijing, do not seem to be appreciated even by the U.S. solar industry’s trade association, a sector worth $28 billion and which is currently importing 80 percent of the solar panels they install.
The tariffs “will create a crisis in a part of our economy that has been thriving,” complained the Solar Energy Industries Association, which speaks for the manufacturers, installers and those employed indirectly in the sector, warning that 23,000 jobs are now at risk.
As expected, the reactions from Seoul and Beijing have been negative. The South Korean Ministry of Trade, Industry and Energy announced that the country is ready to petition the WTO against this measure, which will affect South Korean manufacturers. According to the South Korean trade minister, Kim Hyun-Chong, the tariffs imposed by the U.S. are “excessive and a clear violation” of the WTO rules. “The U.S. opted for a measure that puts the domestic political situation above international rules,” he added.
Similar rumblings could be heard from Beijing. The head of the Ministry of Commerce’s Trade Remedy and Investigation Bureau, Wang Hejun, called the U.S. decision “an abuse.” The adoption of restrictive measures against imported solar panels and washing machines will “not only hurt the healthy development of the industries in U.S. but also worsen the global trade situation of the relative products.” The trade official announced that “China will work with other WTO members to resolutely defend its legitimate interests in response to the erroneous U.S. decision.”
Mexico complained about the measure as well, since, according to government figures, last year the United States imported washing machines worth $278 million and solar panels worth $127 million from its neighbor.
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