Tariffs, Quotas and Minimum Import Prices Sought in Safeguard Case on Solar Cells

SolarWorld is suggesting that the International Trade Commission recommend to the White House both a tariff and quota on crystalline silicon photovoltaic (CSPV) cells, and is supporting Suniva’s request for an initial price floor of $0.74 per watt, according to documents filed with the ITC. The ITC on Sept. 22 announced an affirmative injury determination in its Section 201 safeguard investigation on CSPV cells (see 1709220044). The investigation now moves to a remedy phase, wherein the ITC will hold a hearing on Oct. 3 to determine what remedies, if any, should be proposed, and is expected to send the president its final report of potential recommendations for remedial action by Nov. 13.

SolarWorld, one of the companies that is requesting the safeguard duties, is proposing an initial tariff of $0.25 per watt on cells and $0.32 per watt on modules in 2018, which would then fall each year during the safeguard's initial four-year relief period, the company said in a brief filed with the ITC. SolarWorld is also proposing an import quota of 0.22 gigawatts for cells and 5.7 gigawatts for modules next year, “also to be liberalized during the 4-year relief period,” a summary of the brief says. “A quota is also necessary to counteract any attempts by foreign producers to evade and circumvent the tariffs.”

Suniva, which filed the original safeguard petition subsequently joined by SolarWorld, is now requesting an initial minimum import price of $0.74 per watt on imported solar modules, down from $0.78 per watt in its initial petition (see 1704260045). SolarWorld "has not proposed the imposition of a minimum import price, [but] it does not oppose Suniva's proposal for such a remedy," the company said in its brief.

SolarWorld suggested several measures to curb potential duty circumvention of any proposed remedies. To address potential circumvention through countries like Canada, for instance -- which doesn’t produce CSPV cells but is where some assembly occurs -- the ITC should recommend special certification procedures for imports “alleged to be NAFTA-originating Canadian products,” SolarWorld said. NAFTA’s marking rules operate so that modules assembled in Canada using non-originating cells can be marked as Canadian goods, and can enter the U.S. duty-free, SolarWorld said.

Trans-shipment through Singapore is another significant concern, as the U.S.-Singapore FTA’s integrated sourcing initiative (ISI) “provides for” duty-free entry of any solar product shipped from Singapore to the U.S., “regardless of where the product was actually made,” the brief says. “While U.S. law requires goods not substantially transformed in Singapore to be marked as products of other countries, the lSI nonetheless incentivizes transshipment of non-excluded goods through Singapore. Adding to the risk of circumvention, Singapore's sole solar producer is a subsidiary of a Chinese state-owned enterprise.”

Other filers recommended that the ITC exclude certain products and countries from its recommendations for potential remedies. The Taiwan Photovoltaic Industry Association suggested exclusion of Taiwanese CSPVs from any remedy, saying such action would be unnecessary given that the ITC “already has remedied” any domestic injury through an affirmative injury vote that led to antidumping duties. The Commerce Department issued AD orders on CSPV products from China and Taiwan in February 2015 (see 1502170009).

The Korea Photovoltaic Industry Association (KOPIA) argued that including South Korea in any safeguard remedy would block “high-technology” products that “meet distinctive needs in the U.S. market,” and said CSPV-related imports from South Korea have consisted “almost entirely” of products not made by U.S. producers. “Eliminating those imports therefore will make little contribution to the health of the domestic industry, but would impose costs on those utility customers who would need to cancel projects for lack of cost-competitive solutions,” KOPIA said.

U.S.-based solar product manufacturers Solatube and Goal Zero said off-grid portable small panels (i.e., CSPV panels with a peak power of 100 watts or less for integration in off-grid portable consumer goods) should be excluded from any import restrictions, both saying they are “insignificant in volume and market share.” The firms also noted in their filings, both submitted by law firm Arent Fox, that it is typical ITC practice to exempt products with such limited imports from Section 201 remedies. These products are characterized by different physical characteristics, production processes and end uses from the larger panels and categories of “on-the-grid products,” which is the focus of the petition for safeguards, Solatube and Goal Zero said.