The Office of the U.S. Trade Representative seeks comments on its recently reinstated exclusion for bifacial solar panels from Section 201 safeguard duties on solar cells. USTR says it is considering whether to again revoke the exclusion, maintain it or “take some other action with respect to this exclusion.” After creating the bifacial exclusion in June 2019 (see 1906120019), USTR had rescinded the exclusion in October based on concerns that it was undermining the solar safeguard (see 1910080054). The Court of International Trade issued an injunction barring the exclusion’s withdrawal in December after finding USTR violated procedural rules by not allowing for public comment (see 1912050063).
Section 201 Safeguards
Section 201 or “safeguard” actions are steps the President can take to provide temporary relief for an industry through the imposition of tariffs or quotas to create a more competitive environment for said industry. Section 201 actions are considered consistent with U.S. international obligations if they conform to the World Trade Organization’s Agreement on Safeguards. To enact Section 201 Safeguards, a U.S. company must first file a complaint with the International Trade Commission, which then makes a determination if the industry is injured by the importation of the goods in question. If the investigation is affirmative, the President may enact the safeguards.
U.S. Trade Representative Robert Lighthizer told lawmakers from Georgia that he will be looking to see if there are remedies for combating “any trade distorting policies that may be contributing to unfair pricing in the U.S. market” for seasonal and perishable products, examining the Trade Act of 1974 and “other trade laws.” The Trade Act of 1974, which includes the recently used sections 201 and 301, gives the president wide leeway to deny preferential tariff treatment to any product, and to add an additional duty of up to 50 percent on any product for significant drug producing or drug transit countries. It also authorizes safeguards, which can be up to 50 percent duties on a surge of imports that is damaging domestic industry.
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A portable solar charger with a plastic cover on its photovoltaic panel does not qualify for an exclusion for off-grid and portable panels from Section 201 safeguards on solar products from China, CBP said in a recently published ruling. The relevant exclusion covers only portable and off-grid panels that are foldable or that have glass covers, so Arlo’s chargers with plastic covers don’t qualify, CBP said in HQ H299136, issued in May but only posted to CBP’s Customs Rulings Online Search System (CROSS) database on Dec. 18.
The U.S. may loosen Section 201 safeguard duties on crystalline silicon photovoltaic cells, according to a notice launching a new International Trade Commission investigation. The U.S. trade representative recently asked the ITC to study the economic effects of raising the threshold below which solar cells enter duty-free from 2.5 gigawatts to 4, 5 or 6 gigawatts, the ITC said. “I request that the Commission analyze the effect of increasing the level of the tariff-rate quota from the current 2.5 gigawatts (“GW”) to 4, 5, or 6 GW, without other changes to the remedy,” the USTR said in the request letter. Currently, imports of solar cells after the first 2.5 gigawatts face a 25 percent tariff, set to fall to 20 percent in February for the third year of the safeguard duty (see 1801230052). Comments are due to the ITC by Jan. 6, 2020.
Some trade remedy exclusions are regulations, and the Office of the U.S. Trade Representative likely violated the Administrative Procedure Act when it revoked a solar cells safeguard exemption without first putting it up for public notice and comment, the Court of International Trade said on Dec. 5 as it approved a preliminary injunction that keeps the exemption in effect.
The Court of International Trade ordered that the Office of the U.S. Trade Representative delay the effective date for a planned withdrawal of an exclusion to Section 201 safeguard measures. The Oct. 25 order, which was approved by Judge Gary Katzmann, followed an agreement between the Justice Department and Invenergy Renewables, which filed a challenge to the withdrawal. Invenergy, which is represented by Crowell and Moring, filed a complaint on Oct. 22 that asked the CIT for an injunction blocking the withdrawal due to what the company said were various statutory violations. The USTR on Oct. 9 said it would withdraw the exclusion for bifacial solar panels consisting only of bifacial solar cells on Oct. 28. Both sides agreed to extend the effective date to Nov. 8. That will give the CIT "additional time to address the arguments that the parties put forth in their respective filings and, thus, foster the just, speedy, and inexpensive resolution of this action," Invenergy said in an Oct. 25 filing.
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Crystalline silicon photovoltaic cells manufactured in Taiwan and finished in India are considered to be of Taiwan origin and are subject to the Section 201 safeguard measures on solar cells, CBP said in a May 24 ruling. At the time of the ruling (H301813), had the cells been of Indian origin, they would not have been subject to the Section 201 tariffs. As of June 5, though, India is no longer exempt from the safeguards because it was removed from eligibility as a Generalized System of Preferences beneficiary country (see 1906050043). The ruling was in response to an internal advice request through the Industrial and Manufacturing Materials Center of Excellence and Expertise.
The Customs Rulings Online Search System (CROSS) was updated Sept. 3. The most recent ruling is dated Aug. 12. The following headquarters rulings not involving carriers were "modified" on Sept. 3, according to CBP: