U.S. Import Duties That Affect Clean Energy

This practice note discusses U.S. tariffs imposed on clean energy technologies as well as key materials used in the construction of clean energy technologies. It addresses the process in which goods can be placed into the purview of the International Trade Commission and ultimately the President. The practice note also looks at the results of recent tariffs in comparison with the expectations.

Antidumping and Countervailing Duties

An interested party on behalf of a U.S. industry in which it belongs, may file a petition with both the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) if the party believes that it is being materially injured by unfair competition through dumping or subsidization of a foreign product. The interested party’s petition is a request that antidumping or countervailing duties be imposed on the foreign product when it is imported to the United States. The DOC then has the responsibility to investigate and determine whether dumping or subsidization has occurred, and if so, the amount of such dumping and subsidization.


Dumping occurs when an imported product is sold in the United States either (i) at a price that is less than what the product is sold for in the foreign manufacturer country’s market or (ii) at a price that is below the foreign manufacturer’s cost of production, after including overhead and profit. If there is no market for the product within the foreign manufacturer’s own country, then the DOC looks to the price the foreign manufacturer charges for the product to customers in a third-party market. The difference between the price of the product sold in the United States and the foreign market is called the dumping margin.

Countervailing Subsidies

Foreign governments can subsidize specific industries by providing financial assistance which benefits the production, manufacture, or exportation of goods. These subsidies can be in the form of direct cash payments, credits against taxes, and loans at terms that do not reflect market conditions. Subsidized products are then subject to being offset by equivalent duties by the US government upon the sale (or likely sale) or importation of the subsidized goods into the US.  However, countervailing duties are imposed upon the entry of goods into the US, not upon the issuance of the original countervailing duty order by the administering authority. Countervailing duties are not required to be imposed on subsidized products imported or sold into the US from a nonmarket economy country if the administering authority cannot identify and measure the subsidies provided by the foreign entity. The administering authority is the International Trade Administration of the Department of Commerce.


If the DOC determines that a foreign product is being dumped or subsidized, the ITC then must determine whether the relevant U.S. industry has been materially injured or will be materially injured, or it is established that a US industry will be materially hindered, by the import of the product into the United States.

Petitions for Relief and Resulting Investigation

If a US industry, or company on behalf of an industry, believes it is being materially injured by dumping or countervailing subsidies, an interested party may file a petition with both the DOC and ITC to request that duties be imposed on imports of the foreign goods. The DOC can also initiate the investigation by its own motion. Interested parties may file both petitions for the same goods, and one or both petitions may involve multiple countries.

Petitions must contain the following information to be deemed sufficient: demonstrate they’re an interested party, describe the imported goods to be investigated and identify the origin country of the imported goods, if for antidumping petitions – provide sales prices or production cost information in the foreign market, for countervailing duties petitions – provide the amount and type of subsidy provided by the foreign government, any critical circumstances, and support that shows evidence of injury or threat of injury.

The DOC makes the first determination of whether there should be an initial dumping or countervailing subsidy investigation within 20 days of the filing. If the DOC finds that there is evidence that supports the allegations of a dumping or subsidization, the DOC will conclude the requirements for the alleged injury have been met, will initiate an investigation, and notify the ITC that they need to begin their investigation. Both departments make initial and then final determinations of their respective investigations.

Duties on Chinese Solar PV Imports


In 2006, the central government of China identified the solar photovoltaic (PV) industry as a “key industry” in the Catalogue of Chinese High-Technology Products for Export.[1] As a result, Chinese PV manufacturers were eligible for various financial support from the Import-Export Bank of China in the form of export credits, guarantees, and insurance.[2] Further, in 2010 the China Development Bank provided the top-five PV manufacturers in China with $30 billion in low-cost loans.[3] As a result, the production of solar PV cells in China increased exponentially such that China’s market share increased from approximately 32% in 2009 to 60% in 2011.[4]  Since 2007, China has become the global leader in solar PV production in the world.[5]

In 2012, the ITC approved the determination from the DOC that China subsidized its solar PV cells and modules and issued antidumping and countervailing duties on solar PV imports of about 31% and 3-4% respectively.[6] However, Chinese manufacturers evaded the duties by using a loophole which consisted of importing cells manufactured in other countries, usually Taiwan, and then assembling the modules in China. This resulted in a second round of import duties in 2014 which closed the loophole by including Taiwanese solar PV components.[7] By 2017, less than 6 percent of Chinese manufactured solar PV products ended up in the US.

Suniva and the Trump Administration Solar Tariff

Days after filing for bankruptcy in April 2017, foreign-owned solar cell manufacturer Suniva filed a complaint with the U.S. International Trade Commission (ITC). Suniva claimed that Chinese and other Southeast Asian solar manufacturers were flooding the U.S. market with solar PV panels and their components, causing the prices to plummet. [8] The parties argued that this preventing U.S. based manufacturers from being able to compete and also caused harm to American businesses and jobs. Suniva also asserted that the growth in manufacturing outside the U.S. was unforeseen and unanticipated.

The ITC accepted that complaint for review, which requested “global safeguard relief” from imports of crystalline solar photovoltaic (CSPV) cells and modules and initiated an Antidumping and Countervailing duty investigation. The ITC found that from 2012-2016, imports of solar PV solar cells and modulates increased by approximately 500% and prices fell by 60%, such that U.S. producers ceased domestic production, moved their facilities to other countries, or declared bankruptcy.[9]

In opposition to the Suniva claim, the solar industry argued the tariffs would cause tens of thousands of jobs being lost, billions of dollars in solar investments would be delayed or cancelled, and that the two companies’ own poor business practices actually led to their bankruptcies.  

Despite the overwhelming opposition, the ITC determined that the increased solar cell and module imports caused serious injury to the U.S. industry. Part of ITC’s reasoning was that U.S. companies could not have foreseen that Chinese policies would have led to excess solar PV manufacturing capacity, and that it would be directed at the U.S. This was likely included to protect the tariffs from any World Trade Organization (WTO) scrutiny following the likely challenge from China and Taiwan with the WTO. The interagency Trade Policy Staff Committee and United States Trade Representative recommended tariffs on imported solar cells and modules from 2018 until 2022 that start at 30% and decrease annually by 5% before expiring in 2022. China filed a WTO challenge to the US tariffs on solar panels by arguing that the tariffs damage China’s rights and interests, as well as undermine the WTO’s authority and dispute settlement mechanisms to maintain multilateral trade rules.


First, the first 2.5 gigawatts of solar cells or modules will be excluded from tariffs. Additionally, the tariff does not apply to imported solar cells and modules from “developing countries,” so long as the country’s share of total imports does not exceed three percent and all exempted countries cannot cumulatively exceed nine percent of total CSPV imports. Notable “developing countries” include India, Turkey, and Brazil, all of which already had existing solar manufacturing capacity that could be ramped up quickly as a result of the exemption.

In September 2018, a U.S. company that manufacturers panels in Mexico and Malaysia was granted an exemption from the Section 201 tariffs. The exemption was granted specifically for the company’s Interdigitate Back Contact (IBC) cell technology, which are high-efficiency cells and modules that can be distinguished from the cheaper, commoditized imports that were the target of the tariffs.

Effects of the 2017 Solar Tariffs

After the tariffs were announced, analysts projected 7.6 GW less solar being deployed and 23,000 American jobs lost in 2017 as a result of an approximately eleven cent per watt increase in the first year of the tariffs (pricing was approximately $0.33 per watt and steadily decreasing). However, the tariff on imported solar panels coincided with a global drop in demand (mostly by China after they cut subsidies for domestic solar installations), causing CSPV prices to plummet and excess solar panels within the industry. This has mitigated the effect of the tariffs for both residential installations and utility scale projects, where there was a record amount of utility scale development in the first half of 2018.

While a portion of that growth must be attributed to rushing of development before the sunsetting of the investment tax credit, the falling costs and flat growth during the imposed tariffs have led most investors to be bullish on the U.S. solar market.

A Chinese executive speaking on condition of anonymity and a Chinese researcher also downplayed the actual effect of the U.S. solar tariffs, instead describing the tariffs as “a microcosm of the big trade spat.”

The Steel and Aluminum Tariffs Disrupt the Wind Industry

In March 2018, President Trump ordered a 25% tariff on imported steel and 10% tariff on imported aluminum, holding that cheap foreign metals pose a threat to national security by degrading the American industrial base. While these tariffs heard a smaller outcry in opposition from clean energy groups, the steel tariffs are expected to disrupt the strong growth expected in the wind industry due to federal tax credits winding down. The American Wind Energy Association has stated that the steel tariffs could raise the cost of wind power in the U.S. by as much as ten percent. The disruption comes from inability to determine long term pricing and deliverability, uncertainty regarding exemptions for Canada and Mexico, possibilities of new exemptions, and a challenge to the World Trade Organization by the EU and others.

submitted by:  Kevin Watson, Cleantech Law Partners Energy Lawyer

[1] The Erratic Path of the Low-Carbon Transition in China: Evolution of Solar PV Policy at 14.

[2] Id.

[3] Andrews-Speed, Philip & Zhang, Sufang. Renewable Energy Finance in China. p.180 (2015)

[4] Andrews-Speed, Sufang & Ji at 19.

[5] Andrews-Speed & Sufang at 174.



[8] SolarWorld, who is also foreign owned with manufacturing based in the US, later joined as a co-petitioner in August 2017.


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