The Trump administration Monday afternoon announced so-called "safeguard" tariffs on foreign imports of washer machines and solar cells and modules.
While the move is intended to protect domestic manufacturers, Nobel laureate Joseph Stiglitz told Bloomberg, "You can't build the world that we had in 1950." Stiglitz cited the need to move on to new industries, like installing solar panels, which he said the tariffs make more difficult.
What It Means
President Trump approved three-years of tariffs of up to 50 percent on large residential washers in the first year, after the first million or so imports (which will face a 20 percent rate), and four years of solar tariffs of up to 30 percent in the first year. In addition, the first 2.5 gigawatts of imported solar cells will be exempt.
Whirlpool Rises
Whirlpool Corporation WHR shares rose more than 3 percent. In a statement to Benzinga, Chairman Jeff Fettig praised the Trump administration and called the decision "a victory for American workers and consumers alike."
Whirlpool, which has won two anti-dumping cases against foreign companies Samsung and LG, filed a safeguard petition last May. The manufacturer's stock rose Jan. 17 when Trump made mention of South Korea "dumping" washing machines during a speech.
Now, Fettig says, there is hope that Monday's decision "finally reestablishes real competition."
First Solar Shines
When it comes to the solar safeguard tariffs, First Solar, Inc FSLR is the top name poised to benefit, according to Vertical Group's Gordon Johnson.
In an email, Johnson told Benzinga, "I do believe [First Solar] is the biggest beneficiary here as their panels are excluded from the scope of the tariff."
First Solar is a true U.S. module producer -- in the sense that its production capacity is literally in the U.S. -- and as such, Johnson's thesis remains that these tariffs are good for it and its domestic peers, and "bad for everyone else."
Johnson notes some investors are assuming the 2.5 gigawatt exemption could play well for Chinese solars, but he disagrees, finding it unlikely Chinese vendors will be enticed to build module plants in America for four years of declining tariffs.
"It would take 12-18 months to build," Johnson explained, "so, functionally, the cell exemption is useless."
Shares of First Solar rose 7 percent.
Related Links:
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.