Tariffs: China, solar, steel, aluminum and wind towers | Norton Rose Fulbright
More than 3,400 companies have filed suit against the Trump administration to get back tariffs paid on Chinese products.
The tariffs are being collected under section 301 of the Trade Act of 1974, which authorizes the government to impose tariffs on countries that violate US trade agreements or engage in “unreasonable” or “discriminatory” trade practices. All of the cases have been filed in the US Court of International Trade.
HMTX Industries filed the first suit on September 10, 2020. The others are “me-too” suits that hope to piggyback on whatever relief HMTX Industries receives.
The Trump administration has invoked section 301 to impose five major sets of tariffs. Four were tariffs against different lists of Chinese products. Approximately two thirds of US imports from China are subject to section 301 tariffs ranging from 7.5% to 25%.
Section 301 sets a 12-month time limit for the government to impose tariffs after concluding an investigation. HMTX Industries charges that the list 3 and list 4 Chinese tariffs were imposed after the deadline. Companies have at least two years to sue for refunds. That deadline has now arguably expired for list 3 tariffs, but suits may be filed until at least August 20, 2021 for refunds of list 4 tariffs.
A ruling is expected soon in a separate case challenging section 301 tariffs that the Trump administration imposed on imported steel.
Meanwhile, the United States Trade Representative launched a new section 301 investigation on October 5 into whether Vietnam is manipulating its currency to the detriment of US companies. Exchange rates have historically been the domain of the US Treasury.
The Department of Commerce announced earlier this year that it will treat currency undervaluation as a factor when deciding whether to impose countervailing duties on imports. Commerce is investigating the extent to which weakness in the dong is giving Vietnam an unfair advantage in selling tires into the US market.
The Trump administration suspects Chinese manufacturers of shifting exports through Vietnam in reaction to US tariffs on Chinese imports. The trade deficit with Vietnam is expected to hit $70 billion this year compared to $39 billion in 2018 and $56 billion in 2019.
In a separate action, Commerce adjusted the anti-dumping and countervailing duties on Chinese solar panels in a Federal Register notice on October 2.
Panels made by Chinese panel manufacturer Risen are subject to duties of 106.39%. Trina panels are subject to duties of 50.33%. Another 16 Chinese solar panel manufacturers, including Canadian Solar, JA Solar, Jinko and Yingli, are subject to duties of 68.93%.
Other Chinese panel manufacturers not on the list of 16 face duties of 238.95% on their solar panels.
Importers must post cash deposits when the panels pass US Customs.
These latest figures are the final duties for panels imported in 2017 and 2018.
The Commerce Department recalibrates the actual duties over time and adjustments are made to the cash deposits In such cases, importers may be required to pay more or receive refunds.
The Federal Register notice reminded importers that they must file certificates confirming that they have not been reimbursed for the duties by the Chinese manufacturers. Otherwise, Commerce will assume the duties were reimbursed, in which case it will collect the reimbursement as an additional duty.
Some solar panels are being delivered to the US on a DDP (Incoterms) basis, meaning delivered with the transportation costs, VAT and duties paid by the panel manufacturer. Such arrangements could lead to double duties.
Stefan Reisinger, a trade lawyer in the Norton Rose Fulbright Washington office, said that while technically accurate, developers buying Chinese solar panels duty paid should be able to avoid double duties by reducing the declared value of the panels upon entering the United States by the amount of the DDP price attributable to the duties.
Separately, Commerce said in September that it is considering placing duties as high as 135.06% on steel wire from Turkey used in construction projects to strengthen concrete panels to offset subsidies by the Turkish government.
At the same time, the US Court of International Trade declined to delay enforcement of a July order for the Trump administration to refund the extra section 232 tariffs that the president imposed on Turkish steel. The US doubled a tariff on Turkish steel from 25% to 50% on national security grounds amid a diplomatic spat in 2018.
The price of aluminum may be headed up in the US. The Commerce Department announced on October 9 that it will impose anti-dumping duties on aluminum imported from 18 countries. Importers will have to post cash deposits of 80% for India, 137% for Brazil and 353% for Germany. The required deposits are 30% or less for imports from 13 other countries. The final dumping margins will be calculated early next year.
The US has been collecting a 10% tariff on imported aluminum since March 2018. The anti-dumping duties will be collected on top of the existing tariff.
Finally, two US wind tower manufacturers – Arcosa Wind Tower and Broadwind Towers – asked the US government on September 30 to slap anti-dumping and countervailing duties on towers from India, Malaysia and Spain.
The United States Trade Representative and Commerce Department issued anti-dumping and countervailing duty orders in late August against wind towers from Canada, Indonesia, Korea and Vietnam in response to a petition by the same two tower manufacturers.
Towers imported from China have been subject to a 25% duty under section 301 of the 1974 Trade Act since August 2018.
The two US manufacturers charge that towers from India, Malaysia and Spain increased to $190.8 million during the first six months of 2020 compared to $86.5 million in all of 2019 and $29.3 million in 2018.