Legal Pushback Takes Shape on Trump’s Solar Tariffs

Countries and entities negatively affected by solar tariffs set by the Trump Administration in January on imports of crystalline silicon PV cells are beginning to seek redress — with the latest action taking the form of a lawsuit in the U.S. Court of International Trade.

Manufacturers in Canada came together last week to file the lawsuit, according to international law firm Milbank Tweed Hadley & McCloy, which is not involved in the litigation. Three companies — Silfab Solar, Heliene and Canadian Solar — claim that the tariffs violate the U.S. Trade Act and the North American Free Trade Agreement (NAFTA). Requests for consultation also have been filed with the World Trade Organization (WTO) by Taiwan and the Republic of Korea.

Allan Marks, partner with Milbank, told Renewable Energy World that the Canadian manufactures make two arguments in their lawsuit.

Given that the International Trade Commission’s finding was that Canadian exports had not done substantial harm to U.S. manufacturers, the Canadian manufacturers say the tariff should not have been applied to Canada. That it was, they say, is a violation of U.S. law, namely the Trade Act. In addition, they say that the tariffs violate the spirit of NAFTA, which governs trade between the U.S. and Canada.

Marks said that it is likely that the manufacturers moved forward with the lawsuit because their imports would not benefit from an exemption on quantity.

“If you look at how the tariffs were imposed, you have the 30 percent tariff that declines over four years, in 5 percent increments, but there’s an exemption — the first 2.5 GW of imports are not subject to the tariff, and that only applies to the cells on a standalone basis,” he said. “If they are incorporated into bigger modules, then they will not benefit from the exemption.” The imports by these Canadian manufacturers, he added, are of those bigger modules, and would not, therefore, benefit from the exemption.

The outcome of the case would only affect the import status for Canadian products, and would not, therefore negate the tariff completely, Marks said.

The U.S. government, through the trade representative and the Department of Justice, will reply to the lawsuit, and Marks said it’s likely they will argue that President Donald Trump complied with U.S. law in imposing the tariffs and including Canada.

While the lawsuit by the Canadian manufacturers makes a claim based on violation of U.S. law, complaints filed with the WTO address whether the U.S. action violates international law.

“I think we’ll see more action there, legally with the request for consultations, and compensation potentially, from WTO action that could declare the U.S. measures illegal, and if that were the case, produce retaliatory tariffs,” Marks said. He added that it’s likely that the U.S. will begin to negotiate with other countries and regions to address the claims of international violations.

Lead image credit: CC0 Creative Commons | Pixabay

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Jennifer Delony, analyst for TransmissionHub, started her career as a B2B news editor in the local and long-distance telecommunications industries in the '90s. Jennifer began covering renewable energy issues at the local level in 2005 and covered U.S. and Canadian utility-scale wind energy as editor of North American Windpower magazine from 2006-2009. She also provides analysis for the oil and natural gas sectors as editor of Oilman Magazine.

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