If Congress votes to penalize Chinese imports and start a trade war, it may have a lot to do with the Democrats’ frustration at their inability to build a homegrown clean energy sector. After all, it would be particularly embarrassing if the companies the stimulus has already invested in and which President Obama has boasted about being “the future” were to go bankrupt. So, because the green stimulus has failed to live up to the hype, and mostly created new jobs abroad, leading Democrats may now think the answer is to restrict imports.
Only this week Obama said that he “doesn’t want to see new solar panels or electric cars or advanced batteries manufactured in Europe or in Asia." Yet, as much as 80% of some green programs, including $2.3 billion of manufacturing tax credits, went to foreign firms that employed workers overseas, rather than in the U.S., according to the Department of Energy. So only 82,000 jobs have been created, rather than the 190,700 jobs the White House claims.
The administration's efforts to create jobs through "green" energy projects have proved “disappointing, if not dismal,” reports the Washington Times. Because green subsidies merely create jobs in China, and other countries like Germany, Spain, Japan - a study of 11 U.S. wind farms used their grants to purchase 695 out of 982 wind turbines from overseas suppliers - the job creating benefits of green stimulus spending has been “squandered.”
The administration's appetite for pushing green projects as an economic cure may have been “killed” as the Washington Times says. But there’s still enthusiasm for it in the Democratic party. And besides, the problem with job leakage that affects clean energy is one that affects other high-tech industries benefitting from artificially valued Asian currencies.
Chinese manufacturers in particular have taken the lead in making renewable-energy components, through massive subsidies and its access to cheap labor – which is why the United Steelworkers union have filed a complaint.
And job leakage overseas will only get worse, because the U.S. is the only major developed country still flooding the market with government funding. As governments in Europe and Japan drastically cut back on their green subsidies, competition from overseas suppliers will only grow.
Never mind that wind and solar contribute less than 1% of total U.S. energy production. And never mind that the only way that clean energy can possibly compete with cheaper traditional fuels, such as gas and coal, is though a constant infusion of government funding and by purchasing the least expensive equipment. President Obama simply wants to save face.
Given the importance of maintaining face in Chinese relations - because it translates into power and influence - that is surely something that the Chinese will understand.
Disclosure: No positions
