On April 26, 2017, Suniva, Inc., a U.S. solar panel manufacturer that recently filed for bankruptcy, filed a trade petition asking the Trump Administration to provide relief from the serious injury that U.S. producers are alleged to be suffering at the hands of foreign imports of solar cells and panels. Filed under a rarely invoked provision of the U.S. trade laws, the petition seeks an initial tariff of $0.40 per watt on all solar cells imported into the United States, from any country, and an initial floor price on solar modules of $0.78 per watt. Suniva is also asking for a recommendation that the President negotiate with trading partners to address the global supply chain imbalance in and overcapacity of solar cells and modules. A fact sheet on the petition is available here.
Also known as the “Global Safeguards” provision, section 201 of the Trade Act of 1974 allows a U.S. industry to petition for relief from the injurious effects of imports. A successful case must show that the product at issue is being imported into the United States in such increased quantities as to be a substantial cause of serious injury or threat of serious injury to the petitioning industry. The objective of a section 201 safeguards proceeding is not to remedy unfair trade, but to provide temporary relief to allow a U.S. industry to adjust to import competition. There is thus no requirement to show that the imports under investigation are being subsidized or sold at less than fair value, as is the case in traditional antidumping and countervailing duty investigations. Relief can include import duties and quotas and is potentially (though not necessarily) global in scope. Initial relief is limited to four years, with the possibility of extending for an additional four years.
The U.S. International Trade Commission (“ITC”) has up to 150 days to make a determination of whether the U.S. solar cell and panel industry is seriously injured or threatened with serious injury, and must then transmit its recommendation to the President within 180 days. The President has sole discretion to decide what relief, if any, will be provided to the domestic industry, and can adopt, modify, reject, or ignore the ITC’s recommendations. Once the ITC’s recommendation is transmitted, the President has 60 days to make a final decision.