Solar Squabble Shows How a Trump Trade War With China Could Backfire

For a cautionary tale on how a trade war with China could backfire against the U.S. under President Donald Trump, talk to REC Silicon ASA Chief Executive Officer Tore Torvund.

After the U.S. slapped duties on Chinese solar panel exports in 2011, China shot back about a year later with measures against the American polysilicon exports used to make those units. Along with other producers in the U.S., REC Silicon, a Norwegian company which produces the material at factories in Moses Lake, Washington and Butte, Montana, was clobbered.

The company’s U.S. workforce shrank by about 350 workers over the past three years as orders plunged, Torvund said in an interview in Beijing. The fix: opening a $1 billion joint venture factory in the central Chinese city of Yulin that’ll employ up to 650 workers.

“We need to build capacity inside China since we do not have access to China from the U.S.,” he said. “It started in the U.S. It’s what often happens: When one country makes a move, another country makes a different move.”

The case shows how the tariffs Trump threatened to impose on Chinese exports during campaigning may boomerang back to hurt America. Regardless of the merits of the U.S. tariffs on solar panels –- and of any similar ones Trump might impose -– the outcome was losses for China, the U.S. and the solar industry.

History shows China hits back fast on U.S. trade slights

The story isn’t unique. A U.S.-China trade tiff over tires that began in 2009 probably did create a few jobs in that industry in America. But on balance, it led to an estimated overall loss of more than 2,500 American jobs as consumers spent more on tires and less on other goods, lowering employment in the retail industry, according to a…

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