WTO Finds Nothing Wrong With US Safeguard Tariffs

• WTO has ruled in favor of the US in the case brought in by China accusing the former of going against global trade rules
• It said China has been unable to prove how the US breached WTO rules to impose safeguard duties on crystalline silicon PV products
• USTR's Katherine Tai welcomed the WTO ruling against 'China's baseless challenges'

It is advantage US in case of China dragging the country to the World Trade Organization (WTO) regarding the former's safeguard tariffs imposed on Chinese solar imports of crystalline silicon PV products. Notably these tariffs were imposed by US President Joe Biden's predecessor Donald Trump in January 2018 for a period of 4 years (see Trump Slaps 30% Tariff On Imported Cells & Modules).

Subsequently, China had filed a complaint with the WTO in August 2018 accusing the US of going against international trade rules by imposing these restrictions and that America had failed to establish the required causal link between the increased imports and the serious injury on domestic industry.

The WTO panel concluded that China failed to establish how the US safeguards breached WTO trade rules. US Trade Representative (USTR) Katherine Tai welcomed the WTO panel's decision rejecting 'China's baseless challenges to the US solar safeguard'. The complete WTO ruling can be found on its website.

While solar PV deployment has been quickly growing around the world, it is China that remains the silicon PV manufacturing hub as the industry here is supported by government backed programs and industrial policies favoring renewable energy product manufacturing. With demand being much higher than demand, the majority of module products are exported to other PV markets with growing appetite at rates that are unsustainable for local manufacturers.

The WTO ruling comes at a time when the US government and the local industry is stepping up pressure to encourage domestic PV manufacturing. The administration has put a hold on solar products with Xinjiang produced polysilicon from entering the US which may lead to solar projects being delayed (see Sign Of Times To Come? US Govt. Detaining PV Modules).

In August 2021, law firm Wiley, representing a group called American Solar Manufacturers Against Chinese Circumvention (A-SMACC), filed a petition with the US Department of Commerce to investigate Chinese manufacturers 'unlawfully' circumventing antidumping and countervailing duties on Chinese PV products by trading imports from non-Chinese locations as Malaysia, Thailand and Vietnam (see US Solar Manufacturers File Petitions Against Chinese).

According to news platform Politico, the Solar Energy Industries Association (SEIA) has said it will aggressively oppose the A-SMACC filing because if the tariffs are imposed, it could cause a severe disruption to the US solar market. Meanwhile, NextEra Energy wants the US Department of Commerce to identify the A-SMACC members and junk the petition.