The US solar panel anti-dumping duties versus uniform tariff

Abstract

The US switched its China and Taiwan anti-dumping duties to uniform tariffs on all imports of solar panels in January 2018. This research uses an Equilibrium Displacement Model (EDM) to determine the relative effects of these two tariffs on domestic consumer and producer welfare, employment, government revenue, and environmental costs. The results indicate that uniform tariffs are more effective than the specific-country tariffs because of higher welfare for domestic manufacturers and higher government revenue. However, the uniform tariffs hurt American consumers, employees, and the environment more than the other because of higher domestic price and larger domestic demand reduction. Therefore, if a policy aims to create more jobs and have less effect on consumers and the environment, a specific-country tariff might be preferable. However, uniform tariffs are better if the administration intends to support domestic manufacturers and increase government revenue.