Strategic Avoidance and the Welfare Impacts of U.S. Solar Panel Tariffs

Todd Gerarden, Bryan K. Bollinger, Kenneth Gillingham and Yi Xu

No 34401, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This study examines the effects of tariffs imposed by the U.S. on imported solar panels. We first provide clear evidence that tariff-exposed firms shifted production to locations that did not face tariffs, and that domestic prices increased relative to other markets. We then develop a structural model to analyze welfare effects. We find that the tariffs generated modest gains for domestic manufacturers and for government revenues, but larger losses in domestic consumer surplus and environmental benefits, thereby reducing domestic welfare. Furthermore, the tariffs reduced domestic solar industry employment and wages. By contrast, subsidizing solar panel manufacturing could increase domestic production, employment, and welfare.

JEL-codes: F13 Q48 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
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