US Solar Cell Companies Say Trade Act Doesn't Allow for Duty Pause on SE Asian Cells

U.S. solar cell company Auxin Solar and solar module designer Concept Clean Energy argued on July 22 that Section 318(a) of the Trade Act of 1930 didn't permit the Commerce Department to pause antidumping and countervailing duties on solar cells and modules from four Southeast Asian countries found to be circumventing the AD/CVD orders on these products from China (Auxin Solar v. United States, CIT # 23-00274).

Filing a motion for judgment at the Court of International Trade, Auxin and Concept Clean Energy said the government's interpretation of Section 318(a), which is the provision Commerce used to enact the duty pause, is not entitled to deference. Auxin and Concept Clean Energy invoked the Supreme Court's recent decision in Loper Bright v. Raimondo, which eliminated the principle of deferring to federal agencies' interpretations of ambiguous statutes (see 2406280051).

The U.S. solar cell maker and designer said the trade court must use the traditional tools of statutory interpretation to see if Section 381(a) properly allowed the duty pause. The section lists five types of goods eligible for duty-free treatment: "food, clothing, and medical, surgical, and other supplies." Auxin and Concept Clean Energy said the court must look to these types of goods' "meaning at the time Congress enacted the statute."

In 1930, "none of these categories encompassed" solar cells and modules "or even predecessor technologies," the brief said. That solar cells and modules aren't "food" or "clothing" is "beyond cavil," the companies said.

The trade court should adopt the statutory construction principle of "ejusdem generis," which says that where words or phrases follow specific words or phrases, the words or phrases will be construed as applying to the same kind or class as the more limited terms. As such, the category of "other supplies," should be understood to mean goods such as food, clothing or medical supplies, which solar cells are not, Auxin and Concept Clean Energy said.

Congress "could have provided a more open-ended grant of authority for duty-free importation of any 'goods for emergency relief,'" but it instead only laid out five categories that form an "integral part of the statutory text," the brief said.

Auxin and Concept Clean Energy additionally claimed that Commerce illicitly allowed importers to get duty-free treatment for goods not imported for emergency relief work. The goods aren't "for use in emergency relief work," as required by the statute, since they were imported "before the declared emergency" or because their use wouldn't "relieve the declared emergency," the brief said.

President Joe Biden's proclamation calling for the duty pause was issued in June 2022 and allowed for duty-free import of solar cells and modules until two years after the date of the proclamation, yet Commerce granted duty-free treatment for goods entered before and after the signing of the proclamation, the brief said. No authority allowed the agency to "invalidate congressional intent to close circumventing loopholes," Auxin and Concept Clean Energy argued.

Auxin and Concept Clean Energy also said that merely allowing for the duty-free import of solar cells and modules doesn't alleviate the "emergent condition," which Biden said was the availability of enough electricity generation to meet consumer demand. Mere installation of a solar cell "does nothing to make electricity available" unless it's connected to the electrical grid, the plaintiffs claimed. This "gap between installation and connection was real and pervasive, yet Commerce's standard did nothing to address this inadequacy," the brief said.

Commerce's use of Section 318(a) additionally tosses out key safeguards and flies in the face of past practice, Auxin and Concept Clean Energy argued. For instance, Section 318 was previously limited to "non-profits, disaster relief groups, and government agencies," and the statute required certification of "specific emergency-related uses before obtaining duty-free benefits in Commerce's post-Hurricane Katrina regulations."