Deference Argument in Solar Panel Tariff Exemption Reversal Eliminates Check on Executive, SEIA Says

The Department of Justice's argument that the president should be granted deference to determine whether the procedural boxes have been ticked when eliminating a tariff exemption would eliminate a key check on executive power, counsel for the Solar Energy Industries Association said during July 13 oral argument. The proceedings before Court of International Trade Judge Gary Katzmann come amid SEIA's challenge to President Donald Trump's revocation of an exemption to Section 201 safeguard tariffs on bifacial solar panels (Solar Energy Industries Association et al. v. United States, CIT #20-03941).

"The level of deference the defendants seek here would effectively eliminate the statutory prerequisites established by the Congress," Matt Nicely of Akin Gump, counsel for SEIA, said. "... The president didn’t even make the determinations required by the statute, which is that the industry has in fact made a positive adjustment to import competition. Those are the facts. The court’s role is to be a check when the president doesn’t follow the law, which he clearly failed to do here. The president cannot simply say that something exists, in this case the petitions and statutory requirements, when in fact it doesn’t even exist, then [say] that he deserves deference because it’s his judgment that it does exist. That makes a mockery of this court’s role in ensuring that the executive does not exceed the authority given to it by Congress."

SEIA argues the former president failed to follow the legal requirements to reverse the tariff exemption (see 2106280047). The association said that the law only permits the president to make such a determination when he has received a petition from a majority of the representatives of the domestic industry and that the domestic industry has made a "positive adjustment to import competition," among other requirements.

Due to these requirements, it makes "literally no sense" that the statute would allow for the president to be able to increase trade restrictions, Nicely said. If the statute requires the domestic industry to show that they have made a positive adjustment to import competition after the trade restrictions have gone into effect, then it does not logically follow that industry voices would request even greater trade restrictions, Nicely argued.

The Justice Department forcefully made its case as well, declaring one of the plaintiffs' arguments "absurd." In arguing that the president must receive a petition from a majority of representatives in the domestic industry, the plaintiffs said that disparate letters from different producers does not constitute a majority, suggesting that a majority of the individual sellers of solar panels constitutes a majority. DOJ said that majority is defined by volume in this context (see 2106150059) and to assert that a head count of the domestic firms is required for greater tariff action under Section 201 defies logic. By this reasoning, three people who build hot rods in their garage and sell them could outvote Ford and General Motors, counsel for DOJ said.