Background

A World Trade Organization dispute settlement panel has rejected a Chinese challenge to the United States’ Section 201 safeguard on crystalline silicon photovoltaic cells and other CSPV products containing these cells. A press release from the Office of the U.S. Trade Representative said this decision “is the first successful defense of a general safeguard action before a WTO dispute panel.”

First imposed in February 2018, the safeguard consists of (1) a tariff-rate quota on CSPV cells not partially or fully assembled into other products, with an unchanged duty rate for the in-quota quantity and a higher duty rate for over-quota articles that declines each year (and is currently 18 percent), and (2) a higher duty rate on CSPV modules. It is applicable to imports from all countries except certain developing countries that are WTO members as long as imports from these countries individually or collectively do not exceed specified volume thresholds.

According to USTR, the WTO panel rejected all of China’s claims alleging that the safeguard was inconsistent with various U.S. obligations under WTO rules. “Specifically,” USTR said, “the panel found that the United States established that solar imports had increased as a result of unforeseen developments, established a causal link between increased imports and serious injury to the domestic industry, and appropriately considered other factors besides increased imports that were allegedly causing injury to the domestic industry.”

The decision could embolden the Biden administration to extend the safeguard past its current Feb. 6, 2022, expiration date. The International Trade Commission has launched an investigation into a possible extension and expects to make a recommendation by early December.

For more information on this safeguard, please contact attorney Kristen Smith at (202) 730-4965 or via email.

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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