In addition to the ongoing tragedy in Ukraine, last week was marked by some serious cases of hyperventilation on trade issues. Despite the dire warnings—to be discussed below—I can assure you the apocalypse has not arrived, and the world is not coming to an end, at least not yet.
The first case concerns the imminent decision by the Commerce Department on whether or not to accept an antidumping circumvention petition from Auxin Solar against imports of solar cells and panels from four Southeast Asian countries. The petitioner argues that the items are really Chinese, but are being exported through the other countries in order to evade the dumping duties that are already in place on Chinese exports. If this sounds familiar, you have a good memory. A similar petition was filed last year but was rejected by the Commerce Department because the petitioners refused to reveal their identities publicly. This time around, one of them—Auxin—has done so, removing Commerce’s previous excuse for not acting.
The case has caused massive hand-wringing on both sides. One unnamed source that opposes the petition was quoted as saying it is "like a nuclear bomb going off." Somewhat more temperately, Senator Sherrod Brown (D-OH) said, “I want to find a way to keep solar in this country."
There is a conflict here between trade and environment policy. Those who support the petition argue that our trade laws are being broken with the result that domestic manufacturers are being forced out of business. Opponents, which include companies that install the panels (and account for many more workers than the U.S. companies that manufacture them) argue that tariffs on these additional products will raise prices, cost jobs, and seriously slow down our nation’s transition to solar. Unfortunately, both are right.
The same issue came up in February when President Biden decided in a different case to continue some tariffs on solar items at a slightly lower rate but to exempt bifacial panels, which are largely installed by utilities. Unfortunately for the administration, the antidumping laws do not permit such discretion. If the dumping and circumvention are occurring, and if the domestic industry is injured, tariffs are mandatory. However, the current decision is simply whether or not to accept the petition, which would initiate an investigation to determine whether its allegations are true. Any actual decision on tariffs would come much later. So, comparing the decision to a nuclear explosion is more than a bit over the top. At this point the issue is simple—we have laws and the obligation to follow them and determine the facts. The ultimate outcome will be inconvenient for somebody, but it will not be either the death of our trade laws or environmental disaster.
The second case concerns the administration’s announcement that it will supply additional quantities of LNG to Europe to help them wean themselves off Russian gas. That has produced cries of outrage from environmentalists. According to Collin Rees of Oil Change International, “Expanding natural gas infrastructure is a death blow for the climate. . . . Building new LNG infrastructure would destroy any hope of reaching global climate goals and maintaining a safe future.”
This argument is based not only on the fact that gas, while cleaner than coal, is dirtier than renewables, but also on the fact that ramping up production to ship more to Europe will require substantial investment in additional drilling, liquefaction plants, and terminals. This will make gas an important part of the U.S. and European economies for years to come, slowing down the transition to renewables. The other side, of course, is that there is a war going on. The outcome matters not only to Ukraine but to democracies everywhere, and the United States should be doing everything it can to make sure the good guys prevail. Once again, both sides have a point, but saying the choice is between saving the planet and saving Ukraine and democracy is simplistic. Transition to renewables is inevitable, and good policy will accelerate it. The war means a delay, not the end of the planet, while a victory for aggressive authoritarianism will also have major long-term consequences for democracies.
Finally, in the third case, the apocalyptic statements have yet to arrive, but there is no doubt they will. While in Brussels, President Biden and European Commission president Ursula von der Leyen announced an agreement in principle—which means there are many details to be worked out—on a successor to Privacy Shield, the process for ensuring privacy of EU citizens’ data that was rejected by a European court.
This is an important development, because without such a process, data transmission across the Atlantic would be called into question, potentially affecting millions of transactions. This is our third try—the two previous attempts having failed judicial scrutiny in Europe, essentially over the ability of U.S. security authorities to access the data without its owners’ consent or even knowledge. The ink is not dry yet and the details not all settled, but we should expect cries of outrage from European privacy advocates—and a third lawsuit—as well as complaints from national security hawks in the United States that it intrudes on our national security and sovereignty.
These are all hard issues, and their resolution will have important implications. But they are also a reminder of a lesson I learned on Capitol Hill a long time ago—the truth often lies somewhere in the middle, but sometimes the middle is hard to find. And it is hardest to find when there are people on both sides screaming that the world will end if their side doesn’t win.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
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