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 (NYSE: 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 (NASDAQ: 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.
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A Look
Ahead To Trump's Decision On Solar Tariffs
Latest Ratings for WHR
Date |
Firm |
Action |
From |
To |
Oct 2017 |
Credit Suisse |
Maintains |
|
Neutral |
Oct 2017 |
Bank of America |
Downgrades |
Buy |
Neutral |
Oct 2017 |
RBC Capital |
Downgrades |
Top Pick |
Sector Perform |
View More Analyst Ratings for
WHR
View the Latest Analyst Ratings
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