By Joyce Yu
Shares of Asian manufacturers were hit on Monday as U.S. President Trump just made it more costly to import solar panels and some washing machines into the United States. Shares of U.S. home appliance manufacturer Whirlpool jumped 5% and shares of Arizona-based First Solar surged 4% on Tuesday.
Washington just announced it will impose a 20% tariff on the first 1.2 million imported large residential washers in the first year, and a 50% tariff on additional imports. The tariffs fall to 16% and 40% respectively, in the third year. For solar panels, a 30% tariff will be imposed on imported solar cells and modules in the first year, declining to 15 percent by the fourth year.
Trump ignored an ITC recommendation to exclude South Korean-produced washing machines from LG from the tariffs, imposing tariffs, on the other hand, exceeding the harshest recommendations from ITC members, while the solar tariffs were lower than domestic producers had hoped for.
The decisions came after the U.S. International Trade Commission (ITC) found that imported products were “a substantial cause of serious injury to domestic manufacturers” and hit Asian manufactures hard, especially South Korea’s Samsung Electronics and LG Electronics. Together these two companies export between 2.5 million to 3 million washing machines annually to the United States, with sales of around $1 billion, commanding a quarter of a U.S. market, according to a Reuter’s report. LG Electronics saw its stock price plunge as much as 5% Tuesday morning in Asia, before recovering later in the day. Samsung remained largely unaffected.
China, the world’s biggest supplier of solar panels, slammed what it described as “an abuse” of trade rules. Chinese solar panels have been a key target of global trade investigations. With rise of protectionist sentiment, outlook for Chinese solar firms’ expansion overseas was not optimistic, according to the Chinese authority.
“It shows that the U.S. administration, after taking its time, it’s now indeed starting to roll out measures restricting trade with the idea of living up to the promises made during the electoral campaign,” Louis Kuijs, head of Asia economics at global consultancy Oxford Economics, in Hong Kong shared with the Reuters. “This could very well be just one step of many.”
