Tariffs, like subsidies, are another way for Congress to influence the market prices. They can be used to protect industries at home or to promote initiatives like putting 1 million electric vehicles on the road.
Just last last month the administration announced new tariffs on solar cells imported from China. While this will pacify American solar producers, the consequences are increased costs to builders. When costs for energy efficient projects go up, their return on investment becomes less attractive, thus jeopardizing the entire project and the goal of increasing renewable energy projects. The LA times has a great write up of this HERE. This is just one example of the impact tariffs can have on a specific industry.
Congressional History
First a brief history on Congress and tariffs, compliments of the US Senate Committee on Finance:
“Since 1982, Congress has passed legislation to temporarily reduce or suspend tariffs on certain imported products and make technical corrections to U.S. tariff laws. These bills, known as miscellaneous tariff bills (MTBs… MTBs reduce costs for consumers where there is no domestic production and thus no impact on domestic firms. Overall, the tariff relief contained in MTBs is designed both to be broadly available to any entity that imports and pays duties pursuant to the specified tariff heading and to benefit downstream producers, purchasers, and consumers.”
On March 30, 2012 Senate Finance Committee Chairman Max Baucus announced that members had until April 30 to have their miscellaneous tariff legislation introduced if they wanted it included in the larger all-inclusive MTB.
Below I’ve highlight tariff reductions/suspensions submitted by Senator Carl Levin on April 23, 2012:
|
Bill No. |
Description | Tariff |
|
S.2330 |
Inverters (provided for in subheading 8504.40.95) for converting DC battery output to three phase AC output designed to power an electric drive motor, certified by the importer for use in hybrid electric vehicles |
1.1% |
|
S.2331 |
Stator/rotor parts (provided for in subheading 8503.00.95) designed for use in a combined generator/electric motor with motor function rated at 100 kW, the foregoing certified by the importer for use in hybrid electric vehicles |
FREE |
|
S.2332 |
Power electronics box and static converter composite units (provided for in subheading 8504.40.95), each capable of performing the functions of an AC inverter and an auxiliary power module, capable of reducing DC voltage from 42 V (supplied by battery) to 12 V output and providing three-phase AC output to motor generator unit, the foregoing certified by the importer for use in hybrid electric motor vehicles |
FREE |
|
S.2333 |
Motor generator units with three-phase cable assembly, the foregoing designed to function as a starter motor and electric motor supplementing the gasoline internal combustion engine and as a generator for recharging vehicle batteries in regenerative braking mode; certified by the importer for use in hybrid electric «vehicles (provided for in subheading 8511.40.00) |
FREE |
|
S.2334 |
Lithium ion electric storage batteries, certified by the importer for use in hybrid electric motor vehicles (provided for in subheading 8507.80.80) |
2.4% |
|
S.2339 |
Direct injection fuel injectors (solenoid valves) (provided for in subheading 8481.8090) designed to inject gasoline/ethanol fuel blends directly into the combustion chamber of a spark-ignition combustion piston engine in a high-pressure non-port injection system in a motor vehicle |
1.1% |
Most of these tariffs are focused on the electric and hybrid vehicle industry. The question is (should these be adopted) will savings from these tarrif modifications be passed to the consumer in the form of lower vehicle prices or will they be used to help automakers cover their cost of production?
Also, could these efforts weaken the desire or capability of the American industrial base to develop or produce this technology and extend our dependence on importing advanced vehicle technology?
I guarantee that should American companies begin to produce more of these components and deem imported ones ‘too cheap’; they’ll happily let Senator Levin’s office know.
Happy Motoring,
Juan Barnett
