U.S. settles solar tariff dispute with Canada

Wright solar power plant used Nextracker NX HorizonXTR solar tracker. Source: Nextracker

The announcements by the countries indicate that the United States will lift tariffs on solar products from Canada.

The U.S., Canada and other countries signed an agreement on July 8. They also agreed to prohibit the importation of solar products that are made with forced labor.

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In 2018, the Trump administration implemented the solar safeguard to support domestic solar manufacturing. The safeguard was primarily intended for China, but it was also available to all solar imports.

In February, a panel determined that Canada’s inclusion within the solar safeguard was incompatible with the United States-Mexico-Canada Agreement.

In the same month, President Biden extended solar safeguard for an additional 4 years, but exempted bifacial cells, and doubled the import limit on solar cells from 3 GW to 5 GW. Biden also directed the United States trade representative, to sign agreements with Canada or Mexico regarding trade in solar products.

“Reaching this settlement with Canada will promote greater deployment of solar energy in the United States using products from one of our closest allies, and foster a more resilient North American supply chain for clean energy products made without forced labor,” United States Trade Representative Katherine Tai said in a statement.

September 14, 2021: Joe Biden, President, speaks at the Flatirons Campus, National Renewable Energy Laboratory, Arvada, Colorado. The President received insight into NREL’s long-term research mission, vision, and critical objectives which directly align with his decarbonization goals and national energy priorities.(Photo by Werner Slocum/NREL).

Timeline for solar tariff

2012: Obama administration establishes antidumping and countervailing duties rules based on Chinese solar producers. The AD/CVD links the module to the source of the cells. While cells were shipped out of China, primarily to Thailand for export, modules were still made in China with components that were subsidized by China’s government.

2015: Obama administration adds a follow-up AD/CVD to China and AD against Taiwan in order to address the module/cell workaround. AD/CVD attaches to the origin of the solar module, regardless where it is made.

2018: Trump administration creates Section 201 safeguards and quotas. All solar module imports are subjected to tariffs regardless of origin. However, 2.5 GW of cells can be imported duty free for domestic module manufacturing.

2022: Trump-era Section 201 safeguards extended by the Biden administration for another four years. The cell import quota increases to 5 GW, and bifacial sun modules are exempted.

In May 2017, a group of U.S. solar panel manufacturers filed what is known as a Section 201 safeguard petition with the International Trade Commission (ITC). The petition sought global tariffs to address unfair trade practices by China. The ITC unanimously ruled that the imports had adversely affected U.S. producers of solar panels. In January 2018, President Trump concurred with the ITC recommendation to impose a four-year “safeguard measure” on foreign solar panels. The tariffs started at 30% and gradually decreased to 15%.

The ITC unanimously recommended last fall that tariffs should be extended for an additional 4 years.