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.
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: [Read more...]