The United States has imposed trade restrictions on imports of solar cells and panels starting in 2012, and since then, the number and nature of these restrictions has grown.  The last several weeks have seen a potential for further increase and/or extension of these measures, further complicating trade in this critical component of alternative energy.

First, on September 2, 2021, a World Trade Organization (“WTO”) panel circulated its report in United States – Safeguard Measure on Imports of Crystalline Silicon Photovoltaic Products (DS562), upholding the Section 201 safeguard tariffs imposed by the United States on crystalline silicon photovoltaic cells (“solar safeguard”).  The solar safeguard is a 2.5GW tariff-rate quota that was imposed by the United States in 2018 on imports of solar cells from most countries.  The tariff was initially set at 30 percent, and was scheduled to be reduced by five percentage points each year in the subsequent three years (lasting for a total of four years).  China challenged the solar safeguard at the WTO, arguing that the U.S. International Trade Commission (“ITC”) failed to comply with the 1994 General Agreement on Tariffs and Trade (“GATT”) and the Agreement on Safeguards when conducting its safeguard investigation.  China argued that the ITC had failed to demonstrate that imports of products increased “as a result of unforeseen developments,” as required by the GATT, while also attacking the ITC’s analysis regarding the link between increased imports and serious injury.  The WTO dispute settlement body has historically been skeptical of safeguard actions, often finding them inconsistent with members’ obligations.  However, in this instance, the panel rejected all of China’s claims, and affirmed the reasoning of the ITC.


Continue Reading U.S. Imports of Solar Products Face Increased Restrictions

Economists from the Federal Reserve Bank of New York recently published a report analyzing the US-China trade deficit after the imposition of Section 301 tariffs on imports from China in 2018. They concluded that the trade deficit narrowed, but attributed a significant part of this narrowing to duty evasion on the part of Chinese exporters

As the Biden Administration settles into its second month in office some signals have emerged that have offered insights into the potential direction of US trade policy. Key trade officials, including United States Trade Representative (USTR) Katherine Tai and Commerce Secretary Gina Raimondo, have testified before the Senate as part of their confirmation processes.  The testimonies and responses of both nominees, in combination with the recently released USTR “2021 Presidential Trade Policy Agenda” report, have provided an early blueprint of the President Biden Administration’s position on current trade issues — including USMCA, potential free-trade agreements, US policy towards China, and the climate agenda – and possible new directions.

The international community has been watching these early indicators closely in order to gauge the likely track of US trade policy.   Professionals from Steptoe’s trade group who practice in major jurisdictions around the world weigh in with their take on how those jurisdictions are reacting to these early signals from the US.


Continue Reading International Responses to President Biden’s Trade Policy Positions

On January 13, 2021 the US Department of Homeland Security’s Customs and Border Protection (CBP) announced that, effective immediately, all cotton and tomato products imported from China’s Xinjiang Uyghur Autonomous Region (XUAR) will be barred from entering the United States. The ban, officially called a Withhold Release Order (WRO), is “based on information that reasonably indicates the use of detainee or prison labor and situations of forced labor” according to CBP. This region-wide order joins a growing list of WROs targeting alleged forced labor in China.

Under this WRO, all cotton or tomato products originating from XUAR will be detained at all US ports of entry pending the submission to CBP within three months of entry of satisfactory proof that the products were not produced with forced labor. If CBP is unsatisfied with the provided evidence the products will be seized and potential civil and criminal investigations and penalties could occur. This particular WRO also includes apparel, textiles, tomato seeds, canned tomatoes, tomato sauce and other goods made with either cotton or tomatoes from XUAR. CBO has clarified that the WRO “applies to cotton and tomatoes grown in that region and to all products made in whole or in part using this cotton or these tomatoes, regardless of where the downstream products are produced.” Importers of record are responsible for ensuring no part of their product has cotton or tomato inputs that were harvested or produced at any point in their supply chain via forced labor from XUAR.


Continue Reading US Announces Region-Wide Ban on Cotton and Tomato Imports from Xinjiang

On November 24, 2020, the U.S. Department of Commerce (“Commerce”) issued a preliminary affirmative determination in the countervailing duty (“CVD”) investigation of twist ties from China. What is particularly noteworthy about this preliminary determination is Commerce’s decision to countervail the undervaluation of China’s currency, the Renminbi (“RMB”). This marks only the second occasion – following the investigation of Passenger Vehicle and Light Truck (“PVLT”) Tires from Vietnam earlier this year – that Commerce has countervailed a country’s undervalued currency, and the first time it has done so against China. As discussed further below, Commerce’s determination relied on an analysis of the RMB from the U.S. Department of the Treasury (“Treasury”) which differed in meaningful respects from Treasury’s analysis of the Vietnamese Dong (“Dong”) in the investigation of PVLT Tires from Vietnam, suggesting that a less objective, more qualitative analysis may be applied against the RMB in future cases.

Under U.S. law, a subsidy program is countervailable when it meets three criteria. Specifically, the program must constitute (a) a financial contribution provided by a government authority or public body, (b) to a specific firm or industry, that (c) yielded a benefit to the recipient.

The currency undervaluation allegations examined in the PVLT Tires from Vietnam and Twist Ties from China investigations were based on regulations issued by Commerce earlier this year to interpret these terms in the context of currency undervaluation. Regarding the requirement of specificity, Commerce’s new rule provides that enterprises that buy or sell goods internationally (i.e., enterprises in the traded goods sector) may comprise a “group” of enterprises for specificity purposes.


Continue Reading Commerce Takes Action Against Allegedly Undervalued Currencies