In 1845, Frédéric Bastiat, a French economist, wrote an open letter to his national parliament, pleading for help on behalf of makers of candles and other forms of lighting.
The French market was being flooded with cheap light, he said. Action was necessary: a law closing all windows, shutters and curtains. Only that would offer protection against the source of this "ruinous competition" — the sun.
Three similar pleas are facing the administration of President Donald Trump. But these are not parodies.
On Sept. 22, the United States International Trade Commission paved the way for import restrictions on solar panels, ruling that imports had injured U.S. cell manufacturers. On Sept. 26, the Department of Commerce penciled in tariffs of 220 percent on airliners made by Bombardier, a Canadian manufacturer. A third decision on washing machines is due by Oct. 5.
This cluster of cases represents around $15 billion of annual imports, less than 0.6 percent of the total. But they are chunky relative to other requests, and unusually timed.
"Usually these trade cases come in waves, driven by a recession or a strong dollar," said Douglas Irwin, an economic historian at Dartmouth College. Not this time.
Boeing, a U.S. airplane maker, claimed that Bombardier used government subsidies to sell its new CSeries airliners below cost. Fred Cromer of Bombardier Aerospace accused Boeing of a "commercial attack" to reduce competition.
Boeing has not made planes of the same size as the CSeries since 2006, and all plane makers sell aircraft at a loss in the early years of new models. Senior advisers to Boeing concede that they were too late to spot the competitive threat from subsidies to Airbus. They want to hit Bombardier before it grows up.
Delta Air Lines, which has a dominant presence at Minneapolis-St. Paul International Airport, has been swept up into the dispute after placing an order last year for 75 CSeries planes from Bombardier. "How this is somehow a U.S. trade dispute is bizarre," Delta Chief Executive Ed Bastian said. He added that Boeing's claims were the "ultimate hypocrisy" given the company's supply deals with Gulf carriers.
The case of solar panels was brought by Suniva and SolarWorld Americas. They blame financial troubles on imported solar cells. Cheap Chinese supply has not been contained by narrower anti-dumping duties, they said, as producers have set up operations in third countries.
Whirlpool, an American domestic-appliance company, is seeking broad protection for its washing machines, also complaining that its competitors have bypassed tariffs. Rising imports from Thailand and Vietnam more than offset the drop in imports from China between 2015 and 2016. Its opponents in the case said the company is fiddling with the definition of washing machine to show a surge, and suggested the company has lost market share because of its fading brand recognition.
Even if the cases fizzle, some damage would already have been done. The uncertainty that the trade actions introduce often has a chilling effect on trade and investment. But Trump seems to be itching to impose tariffs, and some import restrictions seem almost certain.
This would sour international relations. The British government has threatened retaliation over the threat to the jobs of Bombardier workers in Northern Ireland. The actions will most probably be challenged at the World Trade Organization. They also risk complicating the continuing renegotiation of the North American Free-Trade Agreement (NAFTA), a deal between the United States, Mexico and Canada. The original deal contains protections for Mexican and Canadian exporters against this sort of trade action.
Bastiat's satirical plea to the French parliament explicitly pitted producers against consumers. Similarly, pricier solar panels, washing machines or plane tickets will lighten consumers' wallets. American businesses that use solar panels would be hurt by import restrictions, too.
Tom Werner, chief executive of SunPower, a U.S. solar-energy company, and an opponent of the action taken by Suniva and SolarWorld, reports that this is the hot topic among his employees. He pointed out that the two petitioning companies employ a tiny fraction of the U.S. solar-energy workforce. The industry association is warning that 88,000 jobs would be at risk if tariffs were imposed.
For trade watchers, one of the most worrying elements of these cases is the way that the solar-panel and washing-machine firms have gone about seeking remedies. Both have resorted to Section 201 of the Trade Act of 1974. That allows firms broad trade protection but has not been invoked since 2001. It fell out of use because of the high legal threshold for proving injury, and the tendency of previous U.S. governments to reject tariffs in the broader national interest.
Companies may be responding to signals from the present administration that it will be sympathetic to claims. "The worry is that this is a crack open of the door and it's about to swing open," said Irwin, the economic historian.
