December 23, 2020
To Fight Climate Change, Don’t Fight Global Trade
President-elect Biden has pledged to couple his administration’s climate policies — a central priority — with policies promoting domestic manufacturing. In a new op-ed at The Hill, AAF President Douglas Holtz-Eakin argues that protectionist trade policies such a tariffs on solar panels will only undermine both carbon-reduction efforts and domestic manufacturing.
How might the incoming administration support both the expansion of carbon-free electricity generation and “green collar” manufacturing jobs? Interfering with international trade dynamics, whether through tariffs or subsidies, is an obvious choice. To reconcile the goals, the incoming Biden Administration might be tempted to impose, for example, a tariff on imported solar panels, the logic being that such protection will level the global solar marketplace and incentivize greater production in the United States.
This experiment has been run, and the outcome is a failure.