(Bloomberg) -- President Donald Trump slapped tariffs on imported solar panels and washing machines, his first major trade move after repeated threats to crack down on what he sees as unfair foreign competition.
The U.S. will impose new duties of as much as 30 percent on foreign-made solar equipment, the U.S. Trade Representative’s office said Monday. The president, who took office a year ago, also approved tariffs starting as high as 50 percent on imported washing machines, according to USTR.
The moves come as Trump prepares to travel to Davos for the World Economic Forum, where the world’s business and political elite are meeting to discuss topics including the backlash against globalization. The new tariffs will add teeth to the president’s “America First” foreign policy after months of threatening to get tough on what Trump sees as the unfair trade practices of nations such as China and South Korea.
“The president’s action makes clear again that the Trump administration will always defend American workers, farmers, ranchers and businesses in this regard,” U.S. Trade Representative Robert Lighthizer said in a statement.
LG Electronics, a maker of domestic appliances, and South Korean solar panel makers fell in Seoul trading on the news while Samsung (LON:0593xq) Electronics (KS:005930) Co., which was little changed, said the tariff on washing machines is a "great loss" for U.S. workers and consumers.
South Korea’s trade ministry said Tuesday it has asked the World Trade Organization to suspend concessions on U.S. imports, seeking to re-instate tariffs. It didn’t specify on which products, and said the timing was coincidental as the move is part of a longer-running dispute.
The two cases were filed under the seldom-used Section 201 of the Trade Act of 1974, which gives the president broad authority to impose tariffs to protect domestic industries.
Trade Action
More U.S. trade action could be on the way. Negotiators from the U.S., Canada and Mexico are meeting this week in Montreal for the latest round of negotiations on a revised North American Free Trade Agreement. Trump has threatened to pull out of the deal if Canada and Mexico don’t bend to U.S. demands.
The solar tariffs are lower than the 35 percent the U.S. International Trade Commission recommended in October after finding that imported panels were harming American manufacturers. The ITC was responding to a complaint by Suniva Inc., a bankrupt U.S. panel maker that sought duties on solar cells and panels.
The president approved four years of tariffs that start at 30 percent in the first year and gradually drop to 15 percent. The first 2.5 gigawatts of imported solar cells will be exempt from the tariffs, USTR said in a statement Monday.
U.S. panel maker First Solar Inc (NASDAQ:FSLR). jumped 9 percent to $75.20 in after-hours trading in New York. The Tempe, Arizona-based manufacturer stands to gain as costs for competing, foreign panels rise.
In the washing machine case, Trump was responding to an ITC recommendation in November of tariffs following a complaint by Whirlpool Corp (NYSE:WHR)., which accused Samsung Electronics and LG Electronics Inc. of selling washing machines in the U.S. below fair-market value.
Trump opted for the most punitive recommendation by ITC judges for residential washers. He ordered a 20 percent tariff on imports under 1.2 million units, and 50 percent on all subsequent imports in the first year, with duties lowering in the next two years.
(Updates with markets in fifth paragraph.)
