Tuesday Dec 06, 2022

President Biden Extends Safeguard Measure on Solar Products for Four Years, Doubles Tariff-Rate Quota for Solar Cells – White & Case LLP

On February 4, 2022, President Biden issued a Proclamation extending the United States’ safeguard measure on imports of certain crystalline silicon photovoltaic (CSPV) cells (whether or not partially or fully assembled into other products).  The Proclamation extends the safeguard measure for four years (the maximum period allowed by law), but reduces its restrictiveness by doubling the volume of the tariff-rate quota (TRQ) on imported CSPV cells to five gigawatts (GW).  The Proclamation also preserves the exemption of bifacial solar panels from the safeguard measure, and authorizes the US Trade Representative (USTR) to negotiate agreements with Canada and Mexico that could lead to the exclusion of those countries from the safeguard remedy. This alert provides an overview of the Proclamation.  

 

Extension of CSPV safeguard measure

President Donald Trump imposed the safeguard measure on CSPV products beginning on February 7, 2018.[1]  The measure was scheduled to remain in place for four years, and consisted of (1) an annual TRQ of 2.5 GW for imports of CSPV cells; and (2) a tariff on imports of CSPV modules and above-quota cells, beginning at a rate of 30 percent ad valorem and declining gradually to 15 percent in the fourth year of the measure.[2]  In August of 2021, two separate groups of domestic CSPV producers filed petitions with the US International Trade Commission (ITC) seeking the extension of the safeguard remedy for an additional four years beyond its scheduled expiration date of February 6, 2022.[3]  On November 24, 2021, the Commission recommended that the President extend the safeguard measure for four years.[4]  

President Biden’s Proclamation concurs with the ITC’s findings that “the safeguard action. . .continues to be necessary to prevent or remedy the serious injury to the domestic industry,” and that “there is evidence that the domestic industry is making a positive adjustment to import competition.”  The Proclamation extends the safeguard measure for four years and doubles the TRQ volume for CSPV cells, so that up to 5 GW of CSPV cells can be imported each year free of safeguard tariffs. Imports of covered CSPV cells in excess of the 5 GW TRQ, and all imports of covered CSPV modules, will be subject to additional tariffs at the rates shown below.

Safeguard Measure on CSPV Cells and Modules, as Modified and Extended by Proclamation 10339
Period Year 5
2/7/2022 – 2/6/2023
Year 6
2/7/2023 – 2/6/2024
Year 7
2/7/2024 – 2/6/2025
Year 8
2/7/2025 – 2/6/2026
Tariff on modules and out-of-quota cells  14.75% 14.5% 14.25% 14%
In-quota quantity (cells only) 5 GW 5 GW 5 GW 5 GW

The Proclamation also maintains the exclusion of bifacial CSPV panels from the safeguard measure.  The Trump Administration first granted the exclusion in June of 2019, but subsequently attempted to withdraw the exclusion after finding that it had undermined the effectiveness of the safeguard measure.  The US Court of International Trade ordered the reinstatement of the exclusion in November 2021, following a legal challenge initiated by the Solar Energy Industries Association (SEIA).[5]  

The safeguard measure as modified by President Biden’s Proclamation is less restrictive than the remedy recommended by the ITC in its December 2021 report.  The Commission recommended that the President maintain the original TRQ level of 2.5 GW for the final four years of the safeguard action, rather than increasing the level of the TRQ.[6]  In the Commission’s view, domestic producers of CSPV modules had derived …….

Source: https://www.whitecase.com/publications/alert/president-biden-extends-safeguard-measure-solar-products-four-years-doubles

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