Frenetic Activity Regarding Solar Energy Equipment Import Duties

With a flurry of recent activity, the U.S. government is administering or considering import duties and quotas on imports of solar energy equipment in three areas:

• The solar module tariff-rate quota under the “Section 201” law.
• Duties on solar modules, industrial batteries and many other items under the “Section 301” law.
• Antidumping and countervailing duties (AD/CVD) on solar modules.

Section 201 Tariff/Tariff-Rate Quota

Section 201 tariffs (the so-called “safeguard” tariffs), imposed under Section 201 of the Trade Act of 1974, are justified as a means of enabling a U.S. industry to adjust to import competition. 

Since 2018, the U.S. government has imposed Section 201 tariffs on imports of crystalline solar photovoltaic (CSPV) cells and modules imported from many, but not all, countries.  (Countries excluded from Section 201 tariffs include Brazil, Cambodia, Indonesia, South Africa and Ukraine, among others.)

• From February 7, 2024 to February 6, 2025, the Section 201 tariff will be 14.25%.
• From February 7, 2025 to February 6, 2026, the Section 201 tariff will be 14%.
• On February 7, 2026, the Section 201 tariff is scheduled to expire.

For CSPV cells, the Section 201 tariff is a “tariff-rate quota.”  The tariff does not apply to the first 5 gigawatts of CSPV cells imported into the United States each year.  Imports of CSPV cells above that level from covered countries face the tariff.

CSPV bifacial modules are currently exempt from the Section 201 tariff.  Since most modules today are bifacial, the Section 201 tariff does not cover most module imports.

On May 16, 2024, however, President Biden announced that he will soon rescind the bifacial panel exemption.  When that occurs, bifacial panels are expected to be subject to the Section 201 tariff until its expiration.

Section 301 Duties

Section 301 tariffs, imposed under Section 301 of the Trade Act of 1974, are justified as a tool to address unfair trade practices of other nations. 

Since 2018, the U.S. government has imposed Section 301 tariffs on imports of most China-origin merchandise.  These Section 301 tariffs do not apply to products produced outside of China.  Among the many Chinese products subject to Section 301 tariffs are:

• CSPV cells and modules.
• lithium-ion batteries.
• battery parts for non-lithium-ion batteries.
• steel and aluminum products.

On May 14, 2024, President Biden instructed the Office of the United States Trade Representative (USTR) to increase Section 301 tariffs on various Chinese products.  The increased tariffs are to be implemented in connection with USTR’s statutorily mandated four-year review of the Section 301 tariffs on imports of China-made merchandise.  

In essence, the President has concurred with USTR’s recommendation in Section IV of USTR’s Review Report that increased tariffs on certain products and new tariffs on other products are needed. 

As a result, among many other changes, the following increases in Section 301 tariffs on Chinese products are expected to become effective in August 2024:

• CSPV cells and modules – from 25% to 50%;
• certain Chinese steel and aluminum products from 0 to 7.5% to 25%; and
• battery parts for non-lithium-ion batteries from 7.5% to 25%.

In addition, the Section 301 tariff on lithium-ion nonelectric vehicle batteries is expected to increase from 7.5% to 25% in 2026.

USTR is planning to publish more detailed information about the Section 301 tariff increases soon, including product-level information of the Harmonized Tariff Codes to which increased tariffs will apply.  USTR is also expected to provide interested parties an opportunity to comment on the increased tariffs. 

AD/CVD Duties

CSPV cells and modules from China have been subject to AD/CVD tariffs since 2012.

In August 2023, the U.S. Department of Commerce (“Commerce”) issued a final determination that the China AD/CVD order is generally to be applied to imports of certain CSPV cells and modules from Cambodia, Malaysia, Thailand and Vietnam on the grounds that the imports are circumventing the China AD/CVD orders. 

However, imports of cells and modules from the four Southeast Asian countries are exempt from AD/CVD tariffs until June 7, 2024, as a result of an AD/CVD waiver established in September 2022 (provided that certain certification and utilization requirements are met).

Separately, in April 2024, U.S. module producers petitioned the U.S. government to impose AD/CVD duties on imports from the four Southeast Asian countries of CSPV cells and modules not covered by the China AD/CVD orders pursuant to the circumvention determination.  On May 14, 2024, Commerce initiated AD/CVD investigations in response to that petition. 

Depending on the results of the new AD/CVD investigations, significant AD/CVD tariffs on all solar cells and panels from the four Southeast Asian countries could be in place by mid-summer.

The schedule of the new cell/panel AD/CVD investigations is provided below.

Timeline of New Solar AD/CVD Cases

If the U.S. International Trade Commission (“USITC”) issues a negative preliminary injury determination, the AD/CVD cases would, subject to possible judicial review, terminate and no AD/CVD tariffs would be imposed on merchandise covered by the cases. 

If the USITC issues a final negative injury determination, again, subject to possible court review, no AD/CVD orders would be issued, and no AD/CVD tariffs would be imposed on merchandise covered by the cases.  Should that occur, any AD/CVD duty deposits collected to that point would be refunded.

Under certain circumstances, it is possible that imports of covered merchandise entering the United States on or after May 14 could face CVD cash deposit requirements and imports of covered merchandise entering the United States on or after July 3 could face AD cash deposit requirements.

If you have questions about this insight, reach out to our authors (Harry Clark and Gregory Hume).