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Im-Politic: Biden Shows How Not to Spur Chinese Progress on Climate Change

21 Sunday Aug 2022

Posted by Alan Tonelson in Im-Politic

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Biden, Biden administration, carbon emissions, carbon footprint, China, clean energy, climate change, Environmental Protecton Agency, EPA, fossil fuels, green energy, green hydrogen, greenhouse gas emissions, Im-Politic, Nicholas Burns, Rhodium Group, solar panels, Todd Stern

It seems that the Biden administration has come up with a novel strategy for competing against China in one dimension of what the President has called a campaign to “win the competition for the twenty-first century”: playing up Beijing’s record, and playing down America’s.

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Our So-Called Foreign Policy: Nothing to See About This Biden-Wall Street-China Connection?

12 Tuesday Jul 2022

Posted by Alan Tonelson in Our So-Called Foreign Policy

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Biden, Biden administration, BlackRock, China, Donald Trump, globalism, inflation, Obama administration, oil, Our So-Called Foreign Policy, solar panels, State Department, Strategic Petroleum Reserve, tariffs, Thomas E. Donilon, Trade, Wall Street

It’s a good thing that conspiracy theories are never, ever true. Otherwise, several recent developments in U.S.-China relations would rightly alarm anyone hoping that U.S. policy toward the People’s Republic would reflect efforts to further American national interests rather than selfish special interests.

Those dangerously loony conspiracy theorists would probably begin by noting that last month, the State Department announced Secretary Antony J. Blinken’s appointments to a Foreign Affairs Policy Board that since 2011 has “provided independent advice on the conduct of U.S. foreign policy and diplomacy” on issues that today include “strategic competition with the People’s Republic of China.”

The new Board is chaired (as originally reported by The Washington Free Beacon) by Thomas E. Donilon, who the wingnuts would no doubt immediately observe was the White House National Security Advisor during the Obama administration, which compiled a consistent record of coddling China on both the national security and the economic fronts. And as the Free Beacon post makes clear, out office, Donilon had been a leading voice for continuing to coddle China, too. 

They’d surely further point out that he’s sure found lucrative employment in the right place. For Donilon is now Chairman of the BlackRock Investment Institute, an arm of the finance company of the same name that happens to be the world’s largest asset manager. These conspiracy-mongers would likely explain that BlackRock has been one of Wall Street’s most enthusiastic boosters of sending huge amounts of capital from the United States and around the world into China. Indeed, it’s just become “the first foreign-owned company to operate a wholly owned business in China’s mutual fund industry,” in CNBC.com‘s words.

The strategy will of course net immense fees for BlackRock and the other finance giants pursuing it. And we’d probably hear from the loons that BlackRock has touted major benefits for the People’s Republlc other than making available to its dangerous totalitarian government oceans of new resources – specifically by helping China “to address its growing retirement crisis by providing retirement system expertise, products and services.”

Then these paranoiacs would presumably try to bolster their credibility by arguing that even lefty zillionaire George Soros has warned that BlackRock-like operations in China will “damage the national security interests of the U.S. and other democracies.”

More grist for the conspiracy industry’s mills: Yesterday’s report in The Wall Street Journal that the Chinese government “is implementing changes to its rules governing publicly offered securities investment funds” that would “include requiring foreign-owned fund managers such as BlackRock and Fidelity to create Communist Party cells when operating in China.” Along with the failure of Donilon or BlackRock (or Fidelity, where I park most of my family’s financial accounts) to utter a peep of protest. Not to mention the silence of the Biden administration.

And the icing on this cake of delusion? Recent signs of a China policy shift by a Biden administration that had been surprisingly Trump-y on the subject given the President’s long history of supporting pre-Trump globalist policies of indiscriminately expanding trade and investment with China. Like the persistent talk of cutting tariffs on Chinese imports to help fight inflation. Like the suspension of new levies on Chinese solar panel imports that were transshipped through Southeast Asian countries to evade U.S. trade curbs. Like the sale of oil from America’s Strategic Petroleum Reserve to a Chinese entity (Unipec).

But obviously there’s nothing to see here. Because as I said, conspiracy theories are never, ever true.

Making News: Back on National Radio Tonight on Economic and Foreign Policy Crises…& More!

15 Wednesday Jun 2022

Posted by Alan Tonelson in Making News

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Biden administration, CBS Eye on the World with John Batchelor, China, competitiveness, Gordon G. Chang, Immigration, Jeremy Beck, Making News, Market Wrap with Moe Ansari, NumbersUSA, solar panels, tariffs, tech, Trade

I’m pleased to announce that I’m scheduled to return tonight on the nationally syndicated “Market Wrap with Moe Ansari” to discuss many of the main (and often closely related) economic and foreign policy challenges facing the United States and the world at large. “Market Wrap” airs weeknights between 8 and 9 PM EST, these segments usually begin midway through the show, and you can listen live on-line here.

As usual, if you can’t tune in, I’ll post a link to the podcast of the inteview as soon as it’s available.

In addition, it was great to see Gordon G. Chang quote me yesterday in his latest blog post for the Gatestone Institute – on the Biden administration’s wrongheaded decision to suspend tariffs on imports of solar panels from Chinese-linked factories in Southeast Asia. Click here to read.

Also, last week, Jeremy Beck of the immigration realist organization NumbersUSA focused his latest blog post on my own take on some little known Open Borders-friendly provisions in the version of the big China and tech competitiveness bill passed by the House of Representatives. Here’s the link.

And I just found out that tomorrow night I’m slated to return to the nationally syndicated “CBS Eye on the World with John Batchelor” to analyze the latest twists and turns in increasingly tense U.S.-China relations. I’ll provide more details here tomorrow – which is a neat segue into my usual reminder tokeep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: A Phony “Industry’s” Phony Case Against Solar Tariffs

25 Wednesday May 2022

Posted by Alan Tonelson in (What's Left of) Our Economy

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China, clean energy, Commerce Department, dumping, green energy, innovation, manufacturing, misinformation, renewable energy, solar energy, solar panels, Southeast Asia, subsidies, tariffs, trade law, transshipment, {What's Left of) Our Economy

What a disgraceful scandal a leader of America’s renewable energy industry just spotlighted! The main evidence presented for imposing steep tariffs on some imports of solar panels has been disavowed by a main source of that evidence!

Except the real scandal is the misinformation-y nature of this claim – which is becoming par for the course for certain supporters of a faster transition to a clean energy-dominated economy..

Let’s begin at the beginning. On March 28, the Commerce Department, one of two federal agencies responsible for administering the U.S. trade law system, agreed to investigate charges by a California-based manufacturer of panels that factories in Southeast Asia are being used by China to circumvent the tariffs that began to be imposed in 2012 on panels and key components made in the People’s Republic. The levies aimed to offset China’s practice of selling these panels at prices far below production costs not because of market forces, but because of subsidies for the manufacturers.

But tariffs to counter this predatory tactic, also called dumping, can sometimes be circumvented by two types of schemes that are also sanctionable by U.S. trade law. Under the first, called transshipment, the guilty parties send their finished goods to other foreign countries, where they’re re-labeled and sent off for final sale in America. Under the second, the guilty parties send the parts and components of finished products to factories in other foreign countries, where they’re assembled and then exported to the United States.

It’s the second practice that formed the basis for this latest circumvention allegation, and as standard in trade law cases, the lawyers for the U.S. plaintiff – a company called Auxin Solar – tried to persuade the Commerce Department to probe whether circumvention was occuring with a brief containing evidence they’d gathered. This is the request approved on March 28, and the investigation is still ongoing.

In an op-ed article yesterday afternoon, though, Gregory Wetstone of the American Council on Renewable Energy made a bombshell accusation. Writing in TheHill.com, Wetstone contended that the research company whose findings Auxin’s lawyers heavily relied on to prove their charges claimed that some of their key data had been used inaccurately.

The lawyers attempted to show circumvention by citing findings from the research firm BloombergNEF documenting that fully 70 percent of the value of the solar panels imported into the United States from some plants in Cambodia, Malaysia, Thailand, and Vietnam came from China. If true, this finding would strongly confirm Auxin’s position that the panels were little more than products sent in pieces from China to Southeast Asia, to be snapped together for shipment to the United States – that is, that the anti-China tariffs had indeed been circumvented.

But according to BloombergNEF, the 70 percent figure only referred to the “cash cost” of the panel inputs. Left out were the upfront capital costs of building the Southeast Asian factories themselves – which they argued made clear that these facilities performed the kind of genuine manufacturing of the imported materials that in turn absolved them of the circumvention charge. In trade law terms, the parts and components and other inputs supposedly underwent substantial transformation, and were not simply disassembled pieces of final products.

As should be clear to anyone familiar with manufacturing, though, the scale of the investment needed to build a factory has no intrinsic relationship to the nature of the work it performs. Moreover, it’s just as reasonable to view the upfront investment as a one-time cost required to launch a simple assembly operation aimed at lasting for many years. So the longer this ruse continues, the greater the importance of the cost of the panel inputs.  

At the same time, plaintiff Auxin’s case doesn’t rely solely or even mainly on reason, or on the 70 percent figure however it’s interpreted. It doesn’t even rely solely or even mainly on trade data showing that remarkably soon after the original tariffs were placed on the Chinese-made solar cells, Chinese shipments to the United States nosedived, and shipments from the four Southeast Asian countries began skyrocketing. Nor does it rely solely or significantly on additional trade data showing that these countries’ imports of Chinese-made solar panel parts, components, and materials have also soared, often exponentially, over the last decade.

Instead, the brief also presents abundant evidence — that’s never been challenged by the tariff opponents — that many of the new Southeast Asian factories exporting so many solar panels to the United States themselves are Chinese-built or -acquired, and therefore -owned. For example:

>”Jinko Solar Group is a producer of solar products, including silicon ingots, wafers, solar cells, and modules, with its production predominantly based in China. After imposition of the [anti-dumping tariffs] in 2015, Jinko Solar built a solar cell and module processing facility in Penang, Malaysia.”

>”JA Solar launched a solar cell processing facility in Penang, Malaysia in 2015. JA Solar produces ingots and wafers in its Chinese facilities. When the company first started exporting solar cells from Malaysia, the company stated that ‘raw materials such as silicon wafers were being imported from China . . . .’”

>”LONGi owns and operates a wholly owned facility in Malaysia. Li Zhenguo, President of Longi Green Tech, touted LONGi’s Malaysia factory as ‘mainly targeting the U.S. market,’ recognizing that ‘Chinese solar products are imposed by about 150% import tariffs by the U.S. {so} {i}t’s almost impossible for China-made products to be sold there.’”

>A company representative has stated that “Trina Solar supplies U.S. orders from Thailand (as opposed to from China). Additionally, the Chairman and CEO of Trina Solar stated that Trina Solar’s projects in the pan-Asia region align the company with the Chinese government’s ‘One Belt, One Road’ initiative.”

>Suzhou Talesun Solar Technology has directly cited the solar tariffs “as the reason for its Thai facility’s existence by stating that it ‘seized the chance to break through the U.S. market through Thai production capacity.’ Talesun’s company website markets its ability to circumvent the orders on CSPV cells and modules from China: ‘with our factories in China and Thailand, we offer a solution adapted to markets affected by anti-dumping laws such as the United States or Europe.’”

>LONGi Green Tech’s president “touted LONGi’s Vietnam factory as ‘mainly targeting the U.S. market,’ recognizing that shipments from China cannot compete based on existing tariffs.”

>”According to the company’s blog, one reason why Boviet’s [an affiliate of Chinese entity Boway] assembly is based out of Vietnam is because ‘Vietnam is not a U.S. listed Anti-dumping and Countervailing region. No tariffs influence Boviet’s U.S. business, and those cost-savings ultimately trickle down to the buyer.’ Boviet Solar also openly advertises that it sources glass for its solar modules from China.”

>”Chinese solar cell manufacturer ET Solar has reported that it was transferring 300 MW of cell capacity from China to be assembled in Cambodia, where it will also assemble modules to target the U.S. market.”

Somehow Hill op-ed author Wetstone and the alternative energy businesses he helps represent missed all of this. Not that anyone should be surprised. Because for many years they’ve been deceptively describing as the U.S. “solar energy industry” a sector that overwhelmingly consists of companies that install solar power systems for homes, businesses, and utilities.

Certainly they create American jobs and facilitate whatever clean energy transition is proceeding. But this sector generates little value or innovation or productivity growth for the U.S. economy. And it has about as much in common with solar manufacturers as nursing home operators have with the cutting-edge American pharmaceutical industry, or as taxi or ride-sharing companies have with U.S.automakers. Therefore, where the solar panels they stick on American roofs and emplace in lots and other vacant or cleared space are concerned, the cheaper the better, no matter where they come from — including China.

In other words, the U.S. “solar energy industry’s” case against tariffs on Southeast Asian panels fails not only on legal and factual grounds (because circumvention of the China levies is so clearly happening). It fails on policy grounds – except for those who don’t mind much of America’s clean energy future, and all the economic and technological and climate benefits it can create, being made by a hostile dictatorship. No wonder these companies and their leaders are so dependent on spreading misinformation to persuade Washington to lift the solar tariffs.

(What’s Left of) Our Economy: Trade Derangement Syndrome

24 Wednesday Jan 2018

Posted by Alan Tonelson in (What's Left of) Our Economy

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American Enterprise Institute, consumers, establishment, Henry McMaster, Mark J. Perry, Samsung, solar panels, South Carolina, South Korea, tariffs, Trade, Trump, {What's Left of) Our Economy

The immediate aftermath of the Trump administration announcement of tariffs on imports of foreign government-subsidized solar panels and modules and washing machines once again made clear that such developments trigger among the silliest comments heard in the economics world. Let’s call this behavior “Trade Derangement Syndrome.”

Exhibit One: Several South Carolina politicians, including Governor Henry McMaster, expressed agreement with Samsung, one of the South Korean companies hit with the washing machine tariffs, that the duties “are a great loss for American consumers and workers.” The consumers part is understandable – though not very credible unless you believe that it’s easy for companies to raise prices significantly in current and foreseeable U.S. economic conditions. But the workers part is completely off the wall.

After all, Samsung is now completing construction of a washing machine factory in the Palmetto State. Further, the company has admitted that the likelihood of the tariffs led it to begin producing in the United States. One of its senior executive American executives, John Herrington, stated earlier this month that, “Because we are committed to supplying the U.S. market from Newberry [South Carolina], no [tariff] remedy is necessary,” Locating the new factory in South Carolina was a separate decision, but Samsung’s rationale couldn’t be more clear. Ditto for the win for South Carolina and its economy.

So what’s with the state’s complaints? According to Herrington, although Samsung intends to supply most of its U.S. needs from the South Carolina facility, “We can’t supply all of those needs immediately in January. We will need to import washers so that we can supply a full range of products to our retailers and consumers during the ramp-up period.

“If we are unable to offer our full range of products to retailers and consumers, we will lose floor space and sales, impacting the success of our South Carolina operation. So the ultimate impact of the proposed tariff is a lose-lose scenario for U.S. production, U.S. employers and U.S. consumers.”

But this explanation makes absolutely no sense – unless you believe that Samsung will cut production even after the factory is running full tilt, and even permanently. What doubtless will happen is that the company will keep importing some products until that point; due to the tariffs, it will absorb lower profits in the process; and then they’ll be restored as the ramp up is completed.

So either the state’s politicians are completely ignorant about manufacturing realities, or they’ve decided that their bottom line is serving as Samsung spokespersons – not promoting South Carolina’s economic fortunes. I.e., maybe they’re not really deranged after all?

The second example of tariff derangement syndrome comes from American Enterprise Institute economist Mark J. Perry. In a post yesterday on the think tank’s blog, Perry blasted the Trump tariffs as an example of the administration’s “American Consumers Last” trade policy. That’s entirely reasonable.

What was entirely goofy was Perry’s claim that the “voice of the American consumer” has been “unheard” as the administration considered the solar and washing machine cases. Can anyone doubt that that’s been a major argument made by the plethora of politicians, lobbyists, academics, think tankers, and editorial writers who opposed the tariffs?

It’s probable that what’s thrown Perry’s compass off is not the absence of pro-consumer arguments in the trade policy debate, but the fact that the President’s decisions could indicate that a multi-decade period of overwhelmingly and singlemindedly pro-consumer American trade policies is ending. If that’s the case, then expect ever greater disorientation in establishment ranks. But what a negligible price to pay for restoring reasonable balance to the nation’s approach to the global economy.

Making News: New Marketwatch Column on the Trump Solar Tariffs — & More!

23 Tuesday Jan 2018

Posted by Alan Tonelson in Making News

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alliances, Apple, Brendan Kirby, burden sharing, Joe Guzzardi, Lifezette.com, Making News, Marketwatch.com, Progressives for Immigration Reform, solar panels, tariffs, Ted Galen Carpenter, The American Conservative, Trade, Trump, wages

I’m pleased to announce the publication of my latest op-ed piece – a column for Marketwatch.com explaining why President Trump was right in slapping tariffs on imported solar energy panels.  Here’s the link.

In addition, Joe Guzzardi of Progressives for Immigration Reform, recently wrote a column based on some of my findings on wage stagnation in the United States.  Through the Cagle Syndicate, it ran in several smaller newspapers around the country – e.g., here and here.

In the January-February issue of The American Conservative, Ted Galen Carpenter of the Cato Institute quoted my views on defense burden-sharing in America’s security alliances in a piece he did on the threats created by these arrangements.  The article, alas, is behind a pay wall.

Finally, in a January 19 post, Brendan Kirby of Lifezette.com featured my views on Apple’s announcement of new investments in U.S. domestic manufacturing.  Here’s the link.

And be sure to keep checking in with RealityChek for news of upcoming media appearances and other developments.

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