Canada pressures U.S. to repeal Trump solar tariffs

Source: By David Iaconangelo, E&E News reporter • Posted: Monday, January 11, 2021

U.S. trade officials are coming under renewed pressure to repeal the Trump administration’s solar tariffs, as President-elect Joe Biden’s stance on the issue remains unclear.

First enacted in 2018, Trump’s tariffs on foreign-made solar panels and cells began at 30% and stepped down to 20% last year. They were followed by additional duties on Chinese-made products that same year. Last October, President Trump issued a proclamation that extended the 2018 tariffs onto an increasingly popular type of “bifacial,” or two-sided, solar panel that had been previously excluded.

Last week, the broader 20% tariff was targeted by Canada’s minister of international trade, Mary Ng, who urged the U.S. Trade Representative to enter talks over exempting Canadian products.

That followed a lawsuit in late December by the solar industry’s main trade group, the Solar Energy Industries Association (SEIA), and several solar developers to stop enforcing bifacial tariffs (Energywire, Jan. 5). SEIA has fiercely opposed Trump’s solar tariffs, arguing that they dampen growth of a resource that makes up only 3% of the United States’ power mix. The group listed a tariff repeal among the top items for the Biden administration to consider in its first 100 days.

In her letter Thursday, Ng accused the U.S. of violating free trade agreements between the two countries and urged the U.S. Trade Representative to enter talks with Canada over the solar fees.

“These tariffs are unwarranted and clearly violate the provisions and the spirit of CUSMA,” she said in a separate statement, using the Canadian acronym for the U.S.-Mexico-Canada trade agreement that was spearheaded by the Trump administration as a replacement for the North American Free Trade Agreement.

Consultations between Canada and the U.S. would represent “first steps” in resolving the dispute under the agreement’s procedures, potentially followed by the establishment of a special international panel to adjudicate the issue, she added.

Canada isn’t currently a top exporter of solar parts to the U.S., often ranking near the bottom of the top 10 countries or failing to make that list altogether, according to the U.S. International Trade Commission.

But it could be a key international partner for the Biden administration on clean energy. The president-elect wants to move the U.S. to 100% carbon-free power by 2035 while also shifting the U.S. away from its dependency on China, whose companies dominate the solar supply chain. And Biden has pledged to emphasize collaboration with other countries in the Americas on energy, including through “new common standards” for decarbonizing manufacturing and mining.

Canada’s request could also be one of the first matters on the agenda of Katherine Tai, Biden’s nominee to be U.S. trade representative, if she is confirmed.

Timothy Fox, vice president at ClearView Energy Partners LLC, wrote in an email to E&E News that despite the Biden administration’s ties with trade unions, the president-elect’s goals on clean energy could lead to a repeal of Trump’s tariffs.

“If not, the Biden Administration would have to defend a Trump trade decision opposed by the Democratic base,” wrote Fox, adding that Canada’s request appeared to be part of an effort to encourage early action on solar tariffs.

The tariff action also comes amid growing concerns in the solar industry that some Chinese manufacturers may be employing former detainees who are coerced into manufacturing work by the Chinese government, which would meet the U.N.’s definitions of forced labor. The detainees are often members of the Uighur ethnic group and frequently live in Xinjiang, a center for solar manufacturing.

Last Friday, The New York Times reported that an Atlanta-based consultancy had linked several major solar manufacturers to forced labor in China. One bill in Congress that would block imports of various products made in Xinjiang passed the House of Representatives by a wide margin last fall and is being considered by the Senate (Energywire, Oct. 26, 2020).

In a statement Friday, SEIA called the newspaper’s report about forced labor “deeply troubling” and reiterated its push for solar companies to leave the Xinjiang region.

“This is the first allegation we’ve seen directly linking the solar industry to abhorrent forced labor practices, and we take these claims very seriously,” said Abigail Ross Hopper, president and CEO of SEIA.