In a rare weekend action, the US Court of International Trade (CIT) issued on Saturday a temporary restraining order that prevented a recent presidential proclamation from re-imposing Section 201 tariffs on bifacial solar panels.
In 2018, President Trump imposed tariffs on imports of solar cells and modules pursuant to Section 201 of the Trade Act of 1974. This statute allows the president to provide temporary import relief on goods that seriously injure or threaten to seriously injure a competing domestic industry. Such measures are referred to as “safeguard actions.” Here, President Trump imposed a four-year tariff which was initially set at 30%, and which was set to decrease by 5% each year. The US Trade Representative (USTR) was also instructed to develop a process which allowed companies to request exclusions from these tariffs. During this process, USTR granted an exclusion for bifacial solar panels – panels that produce solar power from both sides of the module. However, USTR subsequently rescinded this exclusion. This reversal was challenged at the CIT, and in December 2019, the court issued a preliminary injunction barring USTR from withdrawing the exclusion while the case is pending.
President Trump then issued a proclamation earlier this month, ordering that tariffs be re-imposed on bifacial solar panels on October 25, 2020. The proclamation also increases the duty rate for the fourth year of the tariffs from 15% to 18% which takes effect on February 7, 2021. Unsurprisingly, plaintiffs in the action challenging USTR’s rescission of the bifacial solar exclusion expanded their lawsuit to encompass the aspect of the proclamation that revokes the exclusion for bifacial solar panels. The CIT granted their request for a temporary restraining order while it decides whether it is appropriate to issue a preliminary injunction. As a result, bifacial solar panels will continue to be excluded from Section 201 tariffs for now. The increase in the fourth-year tariff rate is also being challenged in this litigation.