12 May 2017
Global Safeguard Petition Filed on Imported Solar Cells and Modules
The U.S. International Trade Commission received on 26 April a new global safeguard petition that could result in up to eight years of higher tariffs and minimum prices on imports of crystalline silicon photovoltaic cells and modules from all sources, including Hong Kong and mainland China. These products are the principal elements of solar photovoltaic power generation systems and are most commonly used in solar panels. Subject merchandise from mainland China is already subject to separate AD and CV duty orders.
The petition covers crystalline silicon photovoltaic cells as well as modules, laminates and panels consisting of such cells, whether or not partially or fully assembled into other products, including modules, laminates, panels and building integrated materials. Included within the scope are cells of a thickness equal to or greater than 20 micrometres, having a p/n junction formed by any means, whether or not the cell has undergone other processing, including cleaning, etching, coating and/or addition of materials (including metallisation and conductor patterns) to collect and forward the electricity that is generated by the cell. Photovoltaic cells that contain crystalline silicon in addition to other photovoltaic materials are also targeted by the petition, such as passivated emitter rear contact cells, heterojunction with intrinsic thin-layer cells, and other hybrid cells. Subject merchandise is classified under HTSUS subheadings 8501.31.8000, 8501.61.0000, 8507.20.80, 8541.40.6020 and 8541.40.6030.
Excluded from the scope of the petition are thin film photovoltaic products produced from amorphous silicon, cadmium telluride or copper indium gallium selenide. Also excluded are crystalline silicon photovoltaic cells not exceeding 10,000 mm2 in surface area that are permanently integrated into a consumer good whose function is other than power generation and that consumes the electricity generated by the integrated crystalline silicon photovoltaic cell. Where more than one cell is permanently integrated into a consumer good, the surface area for purposes of this exclusion is the total combined surface area of all cells that are integrated into the consumer good.
The petition was filed under section 201 of the 1974 Trade Act by Suniva Inc., a U.S. manufacturer of high-efficiency crystalline silicon photovoltaic solar cells and high-power solar modules. This statute requires the USITC to determine whether an article is being imported in such increased quantities as to be a substantial cause or threat of serious injury to a U.S. industry. Section 201 investigations do not require a finding of an unfair trade practice such as under the AD and CV duty laws. However, meeting the injury requirement under section 201 is considered to be more difficult than those of the unfair trade statutes because the injury or threatened injury must be serious and the increased imports must be a substantial cause of serious injury or threat of serious injury.
The USITC is currently evaluating the petition for legal sufficiency and compliance with all applicable rules. When that review is completed, the agency will decide whether to institute an investigation and publish a notice of its decision in the Federal Register. The USITC would have to complete the injury phase of the proceeding within 120 days, although it would be able to extend that deadline by 30 days if it determines that the investigation is extraordinarily complicated. If the USITC’s determination is affirmative it would recommend relief to the president within 180 days after the petition is filed. In this case the petitioner is not alleging the existence of critical circumstances or requesting provisional relief but is urging the USITC to conduct its investigation as quickly as possible.
Criteria for import relief under section 201 are based on those in Article XIX of the GATT, as further defined in the WTO Agreement on Safeguards. Remedies may include tariff increases, quotas, tariff-rate quotas, trade adjustment assistance or any combination thereof, as well as any other action authorised under the law that is deemed likely to facilitate positive adjustment to import competition. In this case the petitioner is seeking the following.
- an additional tariff starting at US$0.40/watt per cell and falling incrementally to US$0.33/watt in year four
- a minimum price starting at US$0.78/watt per module and falling incrementally to US$0.68/watt in year four
- a new economic investment development programme funded with the safeguard tariffs
- an equitable distribution of AD and CV duties collected in two existing AD/CV cases
- bi-lateral and multi-lateral negotiations to reduce global excess capacity
Some of these measures would likely be in violation of U.S. obligations as a WTO member. Any relief proposed by the USITC is merely advisory; it is up to the president to make the final decision on whether to provide relief as well as its form, amount and duration. The relief may initially be imposed for up to four years and extended to no more than eight.
Past presidents have rarely adopted USITC relief recommendations intact. The president may conceivably find that it is in the national economic interest to deny any kind of import relief despite an affirmative recommendation, or he may institute different relief than that recommended by the USITC. If import relief is provided, the USITC would periodically report on developments within the industry during the period of relief. At the conclusion of any relief period, the USITC would have to report to the president and Congress on the effectiveness of the relief action.