CIT Strikes Down Trump-Era Solar Panel Tariff Exclusion Withdrawal
President Donald Trump's decision to revoke a tariff exclusion granted to bifacial solar panels is a "clear misconstruction" of the law since the law permits only trade liberalizing alterations to the existing safeguard measures, the Court of International Trade said Nov. 16, reversing the revocation of the exclusion.
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The plaintiffs, led by the Solar Energy Industry Association, challenged Trump's proclamation withdrawing an exclusion on bifacial solar panels from the Section 201 safeguard duties on imported crystaline silicon photovoltaic solar panels. The case came in the middle of litigation over a similar action previously taken by the Office of the U.S. Trade Representative.
“The decision by the U.S. Court of International Trade to strike down an order by President Trump to change the step-down rate for the Section 201 tariffs and reverse the bifacial module exclusion was clearly the right conclusion," said Abigail Hopper, president and CEO of SEIA, in a statement. "Both actions were an unlawful attempt to harshen the Section 201 tariffs."
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 industry has made a "positive adjustment to import competition." The case hinged on the definition of "modify," with the plaintiffs arguing that this 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."
"In order to ultimately authorize any safeguard measures, the President must also comply with a variety of interpretive and substantive requirements, as well as specific deadlines for both further investigation and the proclamation of relief," the opinion, written by Judge Gary Katzmann, said. "Interpreting Section 204(b)(1)(B) to permit both trade-restricting and trade-liberalizing modifications would run counter to this detailed statutory scheme. ... There is no indication in the statute that Congress intended Section 204 to provide a loophole for the institution of harsher safeguards without the standard procedural restrictions."
The plaintiffs also said that the law only allows the president to order the modification after receiving a petition from a majority of the domestic industry. The plaintiffs said the petition, which consisted of three letters submitted to the USTR, did not constitute a singular petition. However, the statute does not require a petition to take a particular form, thereby permitting the three letters to stand in as the petition, the court said. SEIA also argued that the petition must be submitted to the president himself and not USTR, as was the case for the exclusion withdrawal request. Since the USTR is the "main spokesperson" for the president on international trade and their close relationship on these issues, filing with the USTR was reasonable, the judge said.
The plaintiffs also said that the petition must come from a majority of representatives of the domestic industry, and since only six of 20 solar industry representatives petitioned for this action, it must be denied (see 2106150059). Katzmann rejected this view, finding clearly that the statute allows for an action to proceed when a majority of the domestic industry, by volume, petitions for it.
The plaintiffs further challenged the requirement in Section 201 that the president weigh the economic and social benefits of any safeguard alterations against their costs. While the court agreed with the plaintiffs in finding that yes, the president must in fact conduct this analysis, the judge ultimately sided with the government in saying that the president did in fact meet this requirement in this instance. If the court were to find that the president did not have to conduct such analysis, it would lead to "absurd results," the court said.
"Ultimately, while Proclamation 10101 complied with the procedural requirements of the safeguard statute, it nevertheless clearly misconstrued the reach of Section 204(b)(1)(B) of the Trade Act, and thus constituted an action outside the President’s delegated authority," the opinion said. "Neither the statute nor the statutory scheme supports interpreting Section 204(b)(1)(B) to permit increased restrictions on trade." The court set aside the proclamation, and ordered refunds of duties paid by the plaintiffs.
(Solar Energy Industries Association, et al. v. United States, et al., Slip Op. 21-154, CIT #20-03941, dated 11/16/21, Judge Gary Katzmann. Attorneys: Matthew Nicely of Akin Gump for plaintiffs SEIA and NextEra Energy Inc.; Stephen Tosini for defendant U.S. government)