CIT Properly Tossed Trump's Bid to Withdraw Solar Panel Tariff Exclusion for Bifacial Panels, Briefs Argue

The Court of International Trade properly held that President Donald Trump violated the law by revoking an exclusion on bifacial solar panels from the Section 201 safeguard duties, plaintiff-appellees led by the Solar Energy Industries Association and Invenergy Renewables said in two reply briefs at the U.S. Court of Appeals for the Federal Circuit. SEIA, in its brief, along with Nextera Energy, argued that the trade court correctly found that "all the tools of statutory construction" show that the law prevents trade-restrictive changes to the safeguard measure (Solar Energy Industries Association v. United States, Fed. Cir. #22-1392).

The plaintiff-appellees originally launched the case at CIT to challenge the withdrawal of the exclusion on bifacial solar panels from the safeguard duties on imported crystalline silicon photovoltaic solar panels. Section 204 of the Trade Act of 1974 says the president can, on his or her own authority, "reduce, modify, or terminate" previous safeguard duties after finding the industry has made a "positive adjustment to import competition."

The case hinged on the definition of "modify," with the plaintiffs successfully arguing that it encompasses only trade liberalizing action and the government pushing for a broader definition. The plaintiffs said it defies "logic and congressional intent" to bolster trade restrictions when the domestic industry has made a "positive adjustment." The trade court agreed, ruling that interpreting the statute to include both trade liberalizing and trade restricting modifications would run counter to the "detailed statutory scheme" (see 2111160032).

The U.S. appealed the decision to the Federal Circuit, filing its opening brief in May (see 2205120060). In it, DOJ said that, despite the focus on the statutory scheme, the trade court's interpretation of the law conflicts with "many aspects of the safeguard statute" that show that Congress did not restrict the president's ability to make limited adjustments to a safeguard measure. One such aspect says that not every action affecting a safeguard measure is considered to be trade liberalizing.

In their reply, SEIA and Nextera continued to argue that the case rests on the definition of "modification," with context revealing that Congress used the word in the sense of "to moderate." The appellees argued that "Congress intentionally predicated 'modification' of a safeguard measure on a finding 'that the domestic industry has made a positive adjustment to import competition,' after the domestic industry requested such modification 'on such basis.' It would make no sense for Congress to authorize further trade restrictions after the domestic industry already 'has made' a positive adjustment -- and the Government offers no plausible explanation otherwise."

SEIA and Nextera further argued that interpreting Section 204 as blocking trade-restrictive modifications is needed to "maintain vital statutory protections for parties adversely affected by safeguard measures." The companies pointed out that the president is required to consider multiple viewpoints before increasing trade restrictions -- something that would be circumvented should the president be allowed to impose greater trade restrictions in this way.

"Interpreting section 204(b)(1)(B) to allow the President to further restrict trade, when the President is required to consider nothing but the views of the (presumptively self-interested) domestic industry, would be entirely at odds with the provisions in the safeguard statute that require a consideration of the interests and views of other parties before trade restrictions can be imposed or extended," the brief said.

Joining the fray, Invenergy and EDF Renewables argued in their brief that the president had to find that the economic and social benefits of his action outweighed the costs of such action -- something he failed to do. "Proclamation 10101 contains no determination that the action the President took therein would have greater economic and social benefits than costs, as required by the safeguard statute," the brief said. "The President stated only that the bifacial exclusion had 'impaired' the safeguard measure, which does not show that that he considered the broader economic and social costs and benefits of his action, as opposed to the domestic industry’s ability to adjust to import competition. If the President’s cursory reference to 'impairment' of the safeguard measure were sufficient, it would render Congress’s repeated mandate to determine that a safeguard action have collectively greater benefits than costs meaningless."