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New Safeguard Investigation Launched on Solar Cells

The U.S. International Trade Commission has instituted a global safeguard investigation that could result in up to eight years of higher tariffs and minimum prices on imports of crystalline silicon photovoltaic cells from all sources, including Hong Kong and mainland China. In this investigation, which will be conducted under section 201 of the 1974 Trade Act, the USITC will determine whether such goods are being imported in such increased quantities as to be a substantial cause or threat of serious injury to a U.S. industry.

The articles covered by this investigation are CSPV cells, whether or not partially or fully assembled into other products, including modules, laminates, panels and building-integrated materials. Included within the scope of this proceeding are CSPV cells of a thickness equal to or greater than 20 micrometres, having a p/n junction (or variant thereof) formed by any means, whether or not the cell has undergone other processing, including cleaning, etching, coating and/or addition of materials (e.g., metallisation and conductor patterns) to collect and forward the electricity generated by the cell. Also included are photovoltaic cells that contain crystalline silicon in addition to other photovoltaic materials; e.g., passivated emitter rear contact cells, heterojunction with intrinsic thin-layer cells, and other so-called hybrid cells.

CSPV cells that are assembled into modules or panels are classified under HTSUS subheading 8541.40.6020 while CSPV cells that are not assembled into modules and are presented separately are classified under HTSUS subheading 8541.40.6030. Inverters or batteries with CSPV cells attached can be imported under HTSUS subheadings 8501.61.00 and 8507.20.80, respectively. In addition, CSPV cells covered by the investigation may also be classifiable as DC generators of HTSUS subheading 8501.31.80, when such generators are imported with CSPV cells attached.

Excluded from the investigation are (i) CSPV cells, whether or not partially or fully assembled into other products, that are manufactured in the United States; (ii) thin film photovoltaic products produced from amorphous silicon, cadmium telluride or copper indium gallium selenide; and (iii) CSPV cells not exceeding 10,000 mm2 in surface area that are permanently integrated into a consumer good whose function is other than power generation and that consumes the electricity generated by the integrated cell (where more than one cell is permanently integrated into a consumer good, the surface area for purposes of this exclusion will be the total combined surface area of all cells that are integrated into the consumer good).

The USITC initiated this investigation on 17 May, the date on which it deemed the safeguard petition to have been properly filed after the petitioner provided a revised description of the imported articles and made other amendments. Hearings will be held on 15 August on the issue of injury and, if the USITC’s injury determination is affirmative, 3 October on the question of remedy. Requests to appear at these hearings, as well as pre-hearing briefs, are due by 9 August and 27 September, respectively. Post-hearing briefs are due by 22 August and 10 October, respectively.

The USITC has determined that this investigation is extraordinarily complicated based on the complexity of the issues, including the existence of antidumping and countervailing duty orders on certain covered goods and the global supply chains for covered goods. As a result, the USITC has postponed its injury determination from 14 September to 22 September. The USITC intends to submit its report to the president no later than 13 November.

Section 201 of the 1974 Trade Act requires the USITC to determine whether an article is being imported in such increased quantities as to be a substantial cause or threat of serious injury to a U.S. industry. Section 201 investigations do not require a finding of an unfair trade practice such as under the AD and CV duty laws. However, meeting the injury requirement under section 201 is considered to be more difficult than those of the unfair trade statutes because the injury or threatened injury must be serious and the increased imports must be a substantial cause of serious injury or threat of serious injury.

Criteria for import relief under section 201 are based on those in Article XIX of the GATT, as further defined in the WTO Agreement on Safeguards. Remedies may include tariff increases, quotas, tariff-rate quotas, trade adjustment assistance or any combination thereof, as well as any other action authorised under the law that is deemed likely to facilitate positive adjustment to import competition. In this case the petitioner is seeking the following.

  • an additional tariff starting at US$0.40/watt per cell and falling incrementally to US$0.33/watt in year four
  • a minimum price starting at US$0.78/watt per module and falling incrementally to US$0.68/watt in year four
  • a new economic investment development programme funded with the safeguard tariffs
  • an equitable distribution of AD and CV duties collected in two existing AD/CV cases
  • bi-lateral and multi-lateral negotiations to reduce global excess capacity

Any relief proposed by the USITC is merely advisory; it is up to the president to make the final decision on whether to provide relief as well as its form, amount and duration. The relief may initially be imposed for up to four years and extended to no more than eight. If import relief is provided, the USITC would periodically report on developments within the industry during the period of relief. At the conclusion of any relief period, the USITC would have to report to the president and Congress on the effectiveness of the relief action.

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