President Trump is about to decide whether to raise the price of
solar energy, based on an economic theory refuted in 1845.

In response to a formal complaint, the U.S. International Trade
Commission
ruled this month that imported solar cells are putting too much
competitive pressure on domestic cell producers. The commission
will now examine what remedy would be appropriate, and then it will
be up to the Trump administration to decide whether to take action.
The likely remedy would be to impose tariffs on imported solar
cells, thus protecting U.S. cell manufacturers and raising prices
for consumers.

The solar industry is already receiving this sort of protection.
In 2014, in response to a complaint by U.S. manufacturers, the
Commerce Department
imposed tariffs of up to 78.42 percent on imports of solar
panels made in China, increasing the price for any U.S. consumer
purchasing the panels. But that wasn’t enough for the U.S.
companies filing this year’s complaint relating to the cells that
make up the panels.

This attempt to raise the price of using sunlight for energy
reminds me of one of the most famous documents in the history of
free trade. In 1845, the French economist
Frederic Bastiat wrote “The Candlemakers’
Petition,” in which he imagined the makers of candles and
street lamps petitioning the French parliament for protection from
a most dastardly foreign competitor:

Let’s hope that this time
President Trump stands up for American consumers and workers and
tells the uncompetitive solar panel manufacturers to go build a
better mousetrap.

“We are suffering from the ruinous competition of a rival who
apparently works under conditions so far superior to our own for
the production of light that he is flooding the domestic market
with it at an incredibly low price [ …] This rival … is none
other than the sun.”

After all, Bastiat’s imaginary petitioners noted, how can the
makers of candles and lanterns compete with a light source that is
totally free?

Thank goodness we wouldn’t fall for such nonsense today—or
would we? Solar manufacturers are asking for pretty much the same
thing: protection from a cheaper competitor.

Perhaps the comparison is unfair. After all, the solar
manufacturers haven’t been asking for protection from the sun, only
from foreign companies.

What’s the difference, though? Any source that supplies solar
panels to American consumers and businesses is a competitor of the
American industry. And any source that can deliver any product
cheaper than American companies is a tough competitor. Domestic
producers will no doubt gain by imposing a tariff on their Chinese
competitors, but American companies that install solar power will
lose, by having to pay higher prices for panels.

Indeed, as is often in the case in trade matters, not all the
companies in the industry are in agreement. This case was brought
by two companies, but the largest solar trade group in the nation,
the Solar Energy Industries Association,
opposes tariffs. The association says that if the two companies
get what they are asking for, prices for solar power will rise,
consumer demand will fall, and the industry will lose some 88,000
jobs, about one-third of the current American solar workforce.

Interestingly, the two companies that brought the complaint,
Suniva and SolarWorldAmericasTwo, are based in the United States
but are respectively owned by German and Chinese firms. It’s ironic
that companies made possible by cross-border investment are now
seeking protection from cross-border trade.

Businesses would always prefer a world without competitors. If
they can’t outcompete their rivals in the marketplace, they may be
tempted to ask the government for protection. And our trade laws
actually invite such complaints. But economists agree that
consumers, and the businesses that use imported products, lose more
on net than producers gain. Protectionism is a bad deal for the
American economy. And in this case, a bad deal for anyone who wants
to see more solar energy in the United States.

Let’s hope that this time President Trump stands up for American
consumers and workers and tells the uncompetitive solar panel
manufacturers to go build a better mousetrap.