High School

In 2012, the United States imposed countervailing duties ranging from 24% to 36% on imports of solar panels from China. Which of the following do you predict will happen if the United States decides to eliminate these duties?

A. The U.S. price of solar panels will fall.
B. U.S. production of solar panels will rise.
C. U.S. imports of Chinese solar panels will fall.
D. The U.S. price of solar panels will rise.

Answer :

If the United States decides to eliminate these duties, the U.S. price of solar panels will fall. So the correct option is a.

The most likely result, if the United States agrees to remove these countervailing taxes on imports of solar panels from China, is that the price of solar panels in the United States will decrease (option a).

This is due to the charges, which may be thought of as import taxes, raising the price of Chinese solar panels on the American market. The elimination of these obligations will lower expenses, resulting in a fall in price.

Solar panel output in the United States is not anticipated to increase because of increased competition from less expensive imports. It is odd that U.S. imports of Chinese solar panels will decrease; normally, reducing taxes stimulates more imports because the costs are lower.

Learn more about Countervailing Duties here:

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