By - Jim Vess

Trump solar tariffs draw challenges from around the globe

Energize Weekly, February 21, 2018

The Trump administration tariffs on imported solar cells and modules are drawing fire from around the world.

In the latest challenge, three Canadian companies—Ontario-based Silfab Solar Inc., Heliene Inc. and Canadian Solar Solutions Inc., along with U.S.-based distributor Canadian Solar (USA) Inc.—filed a complaint with the U.S. Court of International Trade in New York on Feb. 7.

The filing came the same day the tariffs went into effect.

Meanwhile, initiatives challenging the tariff have been submitted to the World Trade Organization (WTO) by South Korea, China, Singapore, Taiwan and the European Union.

On Jan. 22, President Donald Trump signed a proclamation setting a four-year tariff, starting at 30 percent and stepping down 5 percent a year to 15 percent in 2021, on photovoltaic solar cells and modules. The first 2.5 gigawatts of imports each year will be exempt from the tariff.

The move was made after the U.S. International Trade Commission (ITC) ruled that imports have undermined domestic solar cell makers, but some question whether it will really help American manufacturers or even hold up to the foreign challenges.

The Canadian lawsuit contends the move to impose tariff restrictions on Canadian manufactures violates both the 1974 Trade Act and the North American Free Trade Agreement.

In the complaint, the Canadian solar module makers point out that the bulk of imports are coming from three countries—Malaysia, Vietnam and South Korea. Canadian imports are equal to about 2 percent of solar modules used in the U.S.

Developing countries are exempt from the tariff until their imports exceed 3 percent of U.S. solar cell and module imports.

The Canadians are seeking an injunction stopping the application of the tariffs against them. “The Proclamation will inflict immediate, severe, and irreversible injuries on the Plaintiffs,” the Canadian complaint said.

The countries that have filed for consultations at the WTO can challenge whether the ITC assessment was accurate or if the increase in imports could not have been anticipated, in WTO terminology that the increase was “unforeseen.”

Expecting the second challenge, the ITC has already released a report saying that the rapid increase in imports was unanticipated.

“Based on the data and other information we evaluated at the time that we reached our affirmative injury determination in this case, we found and confirmed the existence of unforeseen developments that led to the articles at issue being imported into the United States in such increased quantities as to be a substantial cause of serious injury,” the report said.

Those developments included China’s policy of promoting rapid expansion, with government aid, of solar panel manufacturing.

The tariff decision was made under Section 201 of U.S. trade law. The U.S. has never prevailed in a Section 201 at the WTO. In the last such case, President George W. Bush placed sanctions on imported steel, and several nations successfully challenged the move at the WTO. The U.S. steel tariffs were eventually dropped.

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