Section 201 Solar Trade Case Injury Determination
The U.S. International Trade Commission ("ITC" or "Commission") unanimously determined on September 22, 2017 that low-cost, imported solar equipment has caused serious injury to the domestic solar cell and panel industry. As a result, a remedy hearing will be held on October 3rd, followed by a vote on October 31st. The ITC will submit its report containing its injury determination, remedy recommendations, any additional findings and the basis for them to the President by November 13, 2017. President Trump will then have 60 days to accept, modify or ignore the ITC's recommendation. The President's decision will significantly impact the solar industry.
The ITC originally launched the investigation on May 17, 2017 after Suniva, Inc., and SolarWorld Americas requested an investigation under Section 201 of the Trade Act of 1974. The request alleged that without imposition of global safeguards, they will be forced to cease operations. Section 201-commonly referred to as a "global safeguard"-is rarely utilized. The last Section 201 investigation was in 2001. The purpose of the safeguard is to provide temporary relief to a domestic industry while it adjusts to increasing import competition. The relief provided can consist of increased tariffs, quotas, tariff-rate quotas (e.g., a two-level tariff, under which goods enter at a higher duty after the quota is filled), trade adjustment assistance, or any combination of such actions.
Suniva and SolarWorld requested maximum global safeguards of four years with an initial duty rate on imported solar cells of $0.40/watt, in addition to an initial minimum price on solar modules of $0.78/watt. The request would roughly double the price of solar modules.
The petition has created great controversy within the U.S. solar industry, as many are opposed to restrictions on imports which they feel would stifle the growth of this industry. The ITC denied requests from foreign producers, importers and several members of Congress who urged the ITC to issue a negative injury finding and terminate the investigation. The ITC's determination could ultimately protect U.S. free trade partners Canada, Australia, CAFTA-DR countries, Colombia, Jordan, Panama, Peru and Singapore from restrictions, as the Commission made a negative injury finding with respect to imports from those countries.
The decision will have significant implications on solar companies both inside and outside the United States. If the President imposes steep tariffs on imported solar panels, opponents argue it will raise the cost of solar panels, sink demand for installations and ironically do more harm to the overall industry. While the President has made promises to bolster American manufacturing, his decision concerning potential restrictions will consider whether they are in the national economic interest.
The remedy phase of the investigation offers interested parties an opportunity to protect their interests and provide their views to the Commission, the Trump Administration, Congressional and state level representatives. For additional information about the proceeding and its implications, please contact Mark Ludwikowski, mludwikowski@ClarkHill.com | 202-640-6680, Kevin Williams, kwilliams@ClarkHill.com | 312-985-5907, Lara Austrins, laustrins@ClarkHill.com | 312-985-5571, or Tom O'Donnell, todonnell@ClarkHill.com | 312-985-5570 in our firm's International Trade Practice Group.
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