Solar and wind import tariffs
A hoped for easing of tariffs affecting the renewable energy sector once President Biden took office has not happened.
Two US solar panel manufacturers asked the US International Trade Commission on August 2 to extend US import tariffs on solar panels for another four years beyond February 6, 2022 when the current tariffs expire.
The current tariffs were imposed by President Trump in February 2018 at a 30% rate and were originally supposed to remain in place for four years, with scheduled annual reductions to 25%, 20% and 15% over the period. (For more details, see “Tariffs: Effect on US Power Sector” in the April 2018 NewsWire and “Suniva Tariffs” in the December 2017 NewsWire.) However, last October, Trump increased the tariff in the final year from 15% to 18%. World Trade Organization rules allow the tariffs to be extended by up to another four years, but with continued reductions in rates.
The two companies asking for an extension — Auxin Solar and Suniva, Inc. — asked for “only minimal” future reductions in the rate.
The International Trade Commission has until December 8 to examine whether the tariffs remain necessary to prevent serious injury to US solar panel manufacturers and whether the tariff shield has had a positive effect on US manufacturing.
The decision whether to extend will ultimately be made by President Biden.
Canada is attempting to have the tariffs waived on solar panels made in Canada. It asked a dispute settlement panel on June 18 to address whether the tariffs are allowed under the United States-Mexico-Canada trade agreement.
Meanwhile, the threat of an import tariff on transformers appears to have ended.
The US Department of Commerce announced plans in May 2020 to launch an investigation that could have led to tariffs on imported electrical transformers and their components. The affected components were laminated steel used to make cores, wound cores and transformer regulators.
The investigation was launched at the request of steel company Cleveland-Cliffs Inc., which said other countries are evading US import tariffs on steel by sending electrical steel through Canada and Mexico where it is incorporated into downstream products like transformer cores that are shipped to the United States duty free under the United States-Mexico-Canada trade agreement. (For more details, see “Possible Transformer Tariffs Under Review” in the May 2020 NewsWire and “Multiple Tariff Issues in Play” in the December 2020 NewsWire.)
Cleveland-Cliffs said the imports would force it to close two steel mills in Butler, Pennsylvania and Zanesville, Ohio, two key battleground states in the US presidential race in 2020.
Trump took no action ultimately. The Biden administration released the Commerce Department report that was sent to Trump concluding that the imports are a threat to US national security and recommending that tariffs be imposed.
The 360-day deadline for the president to impose tariffs or other import restrictions in the transformer case has passed.
Separately, the US imposed a 73% anti-dumping duty in early August on wind towers imported from Spain. It had already imposed a 6.4% countervailing duty in July on wind towers imported from Malaysia, and is poised to impose a tentative 54.03% countervailing duty on wind towers from India sometime in August. (For earlier coverage of tariffs on wind towers from Canada, Vietnam, Indonesia and South Korea, see “Unpredictable Tariffs” in the February 2020 NewsWire and “Solar and Wind Tariffs” in the December 2019 NewsWire.)
The US has six domestic wind tower manufacturers in nine states who collectively employ 2,205 workers. The US spent $1.8 billion on wind towers in 2020, of which $955 million were supplied by US manufacturers, according to US International Trade Commission data. Malaysia, India and Spain are the three leading foreign suppliers.