U.S. Safeguard Tariffs Set To Expire in February 2022
September 3, 2021–The world’s legal body for settling trade disputes rejected a complaint yesterday by China over U.S. tariffs on solar products made in China.
The World Trade Organization‘s Dispute Settlement body denied all of China’s claims against the U.S. safeguard tariff on China-made solar materials called Crystalline Silicon Photovoltaic Products.
A safeguard measure is a temporary trade restriction countries apply to an import that occurs in such high quantities that it causes serious injury to the domestic industry. They are allowed under WTO rules for emergency and temporary use.
Dispute Started in 2018
In 2017, the U.S. International Trade Commission responded to a complaint by Suniva, Inc. and SolarWorld Americas. It concerned imports of crystalline silicon photovoltaic cells “in such increased quantities” to harm domestic manufacturers. The commission found that the increase in imports led to lower prices, leading to poorer financial performance for U.S. businesses. In 2018, President Donald Trump imposed 30 percent tariffs on CSPV cells and increased duties on CSPV modules. (The tariffs were scheduled for a four-year period in which the rates declined by 5 percent a year.)
China responded by requesting consultations in the WTO. The European Union and Thailand joined the talks. By 2019, China escalated the complaint into a dispute, requesting a formal dispute body to resolve the case.
Decision Reached
Although the Covid-19 pandemic delayed the review, it reached a conclusion yesterday.
In a 96-page document, the WTO dispute body rejected all legal claims by China in the case.
China’s State-Supported Industrial Policy
U.S. lawyers argued that the United States could not have foreseen China’s industrial policies when agreeing to China’s ascension to the WTO. Specifically, its trade negotiators did not know that:
“China would implement a series of industrial policies, five-year plans, and other
-pg. 19 of the WTO Dispute Settlement report on Sept. 2, 2021
government support programmes favouring renewable energy product manufacturing,
including CSPV products.”
Asked about the ruling today, China’s Foreign Ministry Spokesperson Wang Wenbin said simply that “China regrets the decision.”
U.S. Wants ‘Clean’ Supply Chains
Meanwhile, U.S. Trade Representative Katherine Tai welcomed the decision. She noted the safeguard tariffs expire in February in 2022. Furthermore, she said the administration “is committed to ensuring America’s role in resilient clean energy supply chains.” Earlier this Summer, President Joe Biden banned polysilicon products made in China due to concerns about forced labor in Xinjiang.
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