A+Measured+Rebuttal+to+China+Over+Solar+Panels+by+Patrick

//**REMEMBER: DO NOT SUMMARIZE THE ARTICLE!!!**//

=TITLE OF EXTRACT:= = A Measured Rebuttal to China Over Solar Panels =

=SOURCE:= http://www.nytimes.com/2012/03/21/business/energy-environment/us-to-place-tariffs-on-chinese-solar-panels.html

=DATE EXTRACT WAS WRITTEN:= March 20, 2012

=DATE CURRENT EVENT WAS WRITTEN:= March 26, 2012

=EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE:= This article claims that the low-cost Chinese solar panels have driven down the cost of solar energy by two-thirds in the last four years. It gets subsidized by the government and thus, mass exports to other countries such as America. This has narrowed the wide price gap that used to separate solar power from electricity generated by burning fossil fuels. While American manufacturers oppose the imports and filed the trade case against China, users of solar energy have benefited from low-cost Chinese solar panels. According to Mr. Li, the Chinese regulator, it would be wrong for the Commerce Department to assess any antidumping tariffs on Chinese solar panels in May because solar panel prices are even lower in China than in the United States. The U.S. government starts imposing tariffs from 2.9% to solar cells and panels from Suntech, 4.73% to solar cells and panels from Trina Solar, and 3.61% on all other products from all other Chinese solar panel makers. The government hopes that these tariffs will favor the domestic industry when there have been bankruptcies or mass layoffs.

=VOCABULARY TERMS AND DEFINITIONS:=
 * subsidies - A sum of money granted by the government to help an industry or business so that the price of a commodity or service may remain low or competitive
 * tariffs - A tax or duty to beon a particular class of imports or exports
 * imports - of goods or services brought in from abroad
 * exports - Sales of goods or services to other countries
 * percentage tax - A tax that is a percentage of the selling price; as the price gets higher, the tax is more

=DIAGRAMS:= = = =EVALUATION:= In the picture above, it is evident that in order to raise the price of solar panels, the U.S. government imposes some percentage taxes on Chinese solar panels. You can see that the price of the solar panels has increased from Pe (price equilibrium) to P1 (price 1) and the quantity demanded has been decreased from Qe (quantity equilibrium) to Q1 (quantity 1). Even though the U.S. government only imposes a very small amount of percentage tax on Chinese Solar panels, this may not be a very good solution to the problem. It is wrong for the Commerce Department to assess any antidumping tariffs on Chinese solar panels because the prices of panels are even lower in China than in the United states. I think that the United States should look at previous strategies that have been used to manage a country's rapid rise of exporting. The strategies include "voluntary" export restraints by Japan, which were actually not voluntary at all. They include restraints on products and government-led research efforts. These have been done before when U.S. was controlling the economy of Japan in the 1980s. It would be very helpful is China and U.S. have the means to work out a mutually and globally beneficial way to work out a solution to the solar panel trade case, thus, preventing the same thing to happen again.