ITC Proposes Tariffs in Solar Trade Case

31 October 2017 Renewable Energy Outlook Blog
Authors: Jason W. Allen Jeffery R. Atkin

After hearing days of arguments and considering dozens of filings from solar companies both opposed to and in support of trade action, the U.S. International Trade Commission (ITC) today recommended tariffs on imported solar modules of as much as 35 percent. After unanimously voting on Sept. 22 that the U.S. domestic industry was seriously injured by the imports, each commissioner today offered different remedy proposals to be included in a final report to President Trump. The report will be made public “promptly” after its submission, according to Section 201 of the Trade Act of 1974. President Trump will then make a decision on the form and extent of remedies to impose.

While safeguard investigations such as the present case are not country-specific and can lead to a ban on all imports of crystalline silicon photovoltaic cells and modules for up to four years, the ITC’s recommendations fell short of what the petitioners, Suniva and SolarWorld, requested.

With respect to completed modules, ITC Chairman, Rhonda Schmidtlein, recommended a tariff rate of 35 percent, to be incrementally reduced during a 4-year remedy period. Vice Chairman David Johanson and Commissioner Irving Williamson recommended a 30 percent tariff on completed modules, to be phased down by 5 percentage points per year in each of the subsequent years. Commissioner Meredith Broadbent did not recommend an ad valorem tariff, but rather advocated for quantitative restrictions to be set at 8.9 gigawatts in the first year, and increased by 1.4 gigawatts each subsequent year. Further, Commissioner Broadbent recommended that funds equal to the amount generated by import licenses be reinvested to provide support to domestic manufacturers such as through programs at the U.S. Department of Energy.

Trade remedies were requested earlier this year by two small U.S. manufacturers that say they are not able to compete with cheap panels made overseas, mainly in Asia. Suniva, who was later joined by SolarWorld, filed the rare Section 201 petition nine days after seeking Chapter 11 bankruptcy protection. In the petition, the company said a global glut of panels has depressed prices and made it difficult for American producers to compete. Suniva’s petition is opposed by the Solar Energy Industries Association, the sector’s primary trade organization.

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