President Donald Trump's move to slap tariffs on imported solar panels and washing machines is meant to revive domestic industries struggling to fend off foreign competition. But in the affected sectors, there is little agreement on whether it will actually jump-start U.S. manufacturing and jobs.
Solar-industry leaders said tariffs will slow growth in solar-panel installations and the jobs they create, which are more plentiful than in solar-cell manufacturing, a relatively small industry in the U.S.
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South Korean and U.S. washing-machine makers, meanwhile, tussled over whether the trade restrictions will help or hurt domestic employment, with foreign manufacturers arguing that they will hamstring their efforts to make more appliances at new plants in America.
The tariffs, announced Monday and signed by Mr. Trump in the Oval Office on Tuesday, signaled a broader policy aimed at prodding foreign companies to shift production to the U.S. as a way to boost manufacturing employment.
"We're going to benefit our consumers and we're going to create a lot of jobs," Mr. Trump said. "Our action today helps to create jobs in America for Americans."
But the most immediate impact of Mr. Trump opening the door to tariffs may be retaliation by trade partners, as well as an invitation for more U.S. companies to seek help, said Chad P. Bown, a senior fellow at the Peterson Institute for International Economics in Washington. That, in turn, could trigger additional trade skirmishes and fallout for U.S. workers and consumers.
"This is now really starting to escalate," Mr. Bown said. "The concern is that now we're at a tipping point."
The solar trade protection -- which applies to solar panels as well as cells, the solar-panel components that convert sunlight into electricity -- is a 30% tariff in the first year, declining to 15% by a fourth year. The first 2.5 gigawatts of cells imported annually are exempt from the tariff.
Domestically produced solar panels roughly accounted for 10% of installed solar capacity in the U.S. in 2017, according to GTM Research. Imports accounted for almost 90% of solar panels bought in the U.S. in 2016, the latest year for which GTM has data.
The tariff split the U.S. solar industry, with panel sellers and installers largely opposing it on grounds that it will drive up consumer prices, causing sales to slow and leading to a loss of related sales and installation jobs.
The Solar Energy Industries Association forecast that the trade protections will cost 23,000 U.S. jobs this year and cause billions of dollars in solar investments to be delayed or canceled.
"When costs go up, prices go up," said Ed Fenster, co-founder and executive chairman of leading home solar installer Sunrun Inc.
Critics noted that the two companies that petitioned the federal government for relief in the form of import tariffs were imperfect beneficiaries for an "America First" trade policy, as both are foreign-owned: SolarWorld Americas Inc., by a German company, and Suniva Inc., owned in part by a Chinese manufacturer.
But some solar manufacturers expressed optimism. Juergen Stein, chief executive of SolarWorld Americas, said he was hopeful that the tariffs and quotas Mr. Trump approved will be enough to "address the import surge and rebuild solar manufacturing in the United States."
At least one foreign manufacturer is also already looking to open facilities in the U.S. The unnamed company, which is billed as a "leading international manufacturer of solar panels and modules," approached city officials in Jacksonville, Fla. in early January about opening what it called its first manufacturing and assembly operation in the U.S., with a commitment to create as many as 800 jobs by the end of 2019, according to records filed in the city.
On large residential washing machines, the Trump administration is imposing 20% tariffs on the first 1.2 million units annually, then 50% on those imported after that. It is also putting in place a 50% tariff on washer parts. The protections phase down over three years.
About 25% of the 9.3 million residential washers sold in the U.S. in 2016 were imported, according to Kyle Peters, an appliance analyst at the Freedonia Group.
The tariff immediately spurred Whirlpool Corp., which petitioned for relief, to announce that it had added 200 new full-time positions to a washer plant in Clyde, Ohio, to meet an expected boost in demand. The factory already employs more than 3,000 people.
"The new hires are just the beginning of increased investments in innovation, manufacturing and additional manufacturing jobs for Whirlpool and its vendors," the Michigan-based appliance giant said.
But Whirlpool's South Korean competitors said workers at their own U.S. factories will be hurt, along with American consumers, who they and others predict will pay higher prices.
Samsung Electronics Co. said it has hired more than 600 workers for a washer factory in South Carolina. LG Electronics Inc., meanwhile, is racing to build a factory in Tennessee, which it plans to open by year's end.
David MacGregor, an appliance-industry analyst at Longbow Research, said LG and Samsung, already facing big challenges as they ramp up their U.S. washer factories, now will have to deal with a tariff on imported parts.
"The president is playing hardball," Mr. MacGregor said.
Both companies previously warned that new trade barriers could slow the pace of their projects. "This tariff is a tax on every consumer who wants to buy a washing machine," a Samsung spokeswoman said. "Everyone will pay more, with fewer choices."
Jacob M. Schlesinger contributed to this article.
Write to Erin Ailworth at Erin.Ailworth@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
January 23, 2018 17:51 ET (22:51 GMT)