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Global Import Restrictions on Solar Cells and Modules Recommended by ITC

Thursday, November 02, 2017
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission has announced its commissioners’ recommendations for import restrictions on crystalline silicon photovoltaic cells (whether or not fully assembled into other products) following the ITC’s determination in a section 201 global safeguard investigation that increased imports of such products are injuring U.S. producers.

These recommendations will be forwarded by Nov. 13 to President Trump, who faces a Jan. 12 deadline for making a final decision on which, if any, to implement. In this context it is worth noting that one of the two U.S. manufacturers that brought this case, which has urged a tougher set of remedies, called the ITC’s recommendations “disappointing” and “weak” and said they will result “very shortly [in] the extinction of what remains of this manufacturing sector.”

CSPV Cells. One commissioner recommend a four-year tariff-rate quota on CSPV cells that initially provides for a 10 percent tariff on a volume up to 0.5 gigawatts and a 30 percent tariff thereafter. Each year the in-quota tariff rate would decline by 0.5 percentage points, the in-quota volume level would decrease by one percentage point, and the over-quota tariff rate would decrease by one percentage point.

Two commissioners recommended a TRQ under which up to one gigawatt in volume would remain subject to existing duty rates and imports in excess of that volume would be subject to an additional 30 percent tariff. For each year of the four-year TRQ period the over-quota tariff rate would decrease by five percentage points and the in-quota volume would increase by 0.2 gigawatts.

One commissioner recommended a quota on imports of both cells and modules that would start at 8.9 gigawatts and increase by 1.4 gigawatts each year for four years. At least 720 megawatts would be allocated to Mexico in the first year, increasing by 115 megawatts each year. This commissioner said the president should administer these limitations by selling import licenses at public auction at a minimum price of one cent per watt and use the resulting revenues to provide development assistance to domestic CSPV product manufacturers.

CSPV Modules. For CSPV modules, one commissioner recommend an additional tariff of 35 percent that would decline by one percentage point per year for four years. Two commissioners said the additional tariff should be 30 percent, to be phased down by five percentage points per year.

Exceptions. All the commissioners recommended excluding Australia, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Nicaragua, Panama, Peru, Singapore, and beneficiary countries under the Caribbean Basin Economic Recovery Act from the recommended measures. Two commissioners said Canada should be excluded as well.

One commissioner said the president should consider the product exclusions requested by the respondents to which the petitioners have not objected and have indicated they would work to draft appropriate product-specific exclusions.

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