Donald Trump abused his national security power by slapping tariffs on steel and aluminum imports to support domestic producers. Now President Biden is stealing from his predecessor’s industrial policy guidebook by invoking the Defense Production Act to boost domestic green energy. Don’t laugh — the White House wants to make solar panels and heat pumps to stop Vladimir Putin.
In rare good news, the President on Monday brought a sigh of relief to U.S. solar-power developers by announcing he wouldn’t impose tariffs for two years on imported solar panels from southeast Asia. Domestic manufacturers say their Chinese competitors are circumventing anti-dumping duties, and a Commerce Department investigation threatened to raise costs for solar projects in which U.S. firms add value.
Biden’s tariff reprieve is good news for consumers, although the Commerce investigation will continue so he can maintain the fiction that it’s not politically influenced. Most dumping investigations are. This one was egged on by Democrats in Congress, especially Ohio Sen. Sherrod Brown and Rep. Tim Ryan.
Solar panels became commodities as the Chinese discovered how to produce them at lower cost. Cheap imports have helped boost U.S. solar production but they also create a political and economic paradox for Democrats that Biden is now trying to solve.
Liberals promise that green energy will create hundreds of thousands of manufacturing jobs to replace those killed by their war on fossil fuels. But many of those jobs will be in countries with lower labor and energy costs. Hence Biden is turning to the Defense Production Act to boost domestic companies.
That Cold-War era law gives the President broad emergency powers to mobilize domestic manufacturers to produce goods he deems critical to national security. Biden ironically claims that the energy problems created by the left’s climate policies are a national emergency that demands a command-and-control solution. Boosting domestic production of solar panels, heat pumps, building insulation, fuel cells and power transformers can reduce “risks to our power grid,” the White House says.
The North American Electric Reliability Corporation recently warned that most of the U.S. could experience power outages this summer. Blame green-energy subsidies that have forced the shutdown of fossil-fuel and nuclear generators that provide baseload power 24/7. Relying on electric heat pumps and solar panels will make the grid less reliable.
Biden also says the DPA can help rescue Europe from Putin’s energy extortion. “With a stronger clean energy arsenal, the United States can be an even stronger partner to our allies, especially in the face of Putin’s war in Ukraine,” the White House says. But solar panels and heat pumps won’t keep Europeans warm this winter.
What Europe needs is more natural gas, and what the U.S. needs are more pipelines and terminals to export it. But removing regulatory barriers for building this infrastructure isn’t part of the President’s order. Biden doesn’t explain how he’ll use the DPA but says he will “convene relevant industry, labor, environmental justice, and other key stakeholders.”
One of those “stakeholders,” climate alarmist Bill McKibben, days after Putin invaded Ukraine, urged Biden to invoke the DPA to build green-energy factories as FDR did to build weapons in World War II. McKibben wants the President “to incentivize domestic manufacturers” and “procure and install equipment in private industrial facilities to achieve the necessary production goals.”
Let’s hope Biden doesn’t take over petrochemical plants to make solar panels, though that’s what some liberals have in mind. Five Democratic Senators in March urged the President to use the DPA to “mirror the Lend-Lease Act program implemented during World War II, through which the United States sent critical supplies to Allied nations invaded by Germany.”
The DPA is becoming Biden’s household economic remedy. The constitutional risk is the President will increasingly resort to emergency powers to deputize private industry to do his political bidding. The economic risk is that government will misallocate resources and make the U.S. economy even less competitive.
