Bloomberg News

Solar Tariff’s Effects Can’t Be Measured in Jobs, Professor Says

February 09, 2012

Feb. 6 (Bloomberg) -- A report that concluded a tariff on importing Chinese solar panels into the U.S. would threaten more than 60,000 jobs is “nonsense,” a researcher said.

It’s impossible to accurately estimate the number of jobs that would be lost either directly, through closed factories, or indirectly, when people spend less on goods and services, said Russ Roberts, a professor of economics at George Mason University.

“I’m sympathetic to the idea that keeping out Chinese solar panels is not good, but to say it’s not good because it will destroy American jobs is silly,” he said in an interview Feb. 3 from Arlington, Virginia.

Tariffs of 100 percent on solar cells and panels would eliminate almost 50,000 net jobs, and 10,000 more would be jeopardized if China retaliated, according to the Brattle Group, a Washington-based consulting firm that prepared the Jan. 30 report for U.S. companies that oppose a trade case filed in October.

SolarWorld AG’s U.S. unit asked the U.S. International Trade Commission and the Commerce Department to impose tariffs on Chinese solar products from companies such as Suntech Power Holdings Co. and Trina Solar Ltd.

SolarWorld Industries America Inc., acting on behalf of U.S. solar manufacturers, said it was harmed because China’s government uses cash grants, discounts on raw materials, preferential loans and tax incentives to boost exports of solar cells.

The Commerce Department is scheduled to make a preliminary finding March 2.

Direct, Indirect, Induced

The study examined three types of jobs that may be affected by tariffs, direct, indirect and induced, Mark Berkman, one of its authors, said by telephone. A direct job, for example, would be a factory worker, and an indirect job would be someone employed elsewhere in the supply chain.

Induced jobs result when those with direct and indirect jobs contribute to local economies, such as factory employees buying groceries, Berkman said. As many as 24,409 induced jobs would be threatened by duties on panels, according to the study.

A tariff of 50 percent would result in the loss of 14,877 to 43,178 jobs, according to the report.

While short-term job losses may occur, it’s impossible to calculate the exact number, Roberts said.

“When a pro- or anti-free trade group publishes job losses to the single digits, it doesn’t really make it more scientific,” he said. “Trade, or opposing trade, changes the kinds of jobs we have in America, not the number of jobs.”

--Editors: Will Wade, Jasmina Kelemen

To contact the reporter on this story: Justin Doom in New York at jdoom1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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