Biden's Southeast Asia Solar Tariff Moratorium Is Ruled "illegal", Or over $50 Billion in Tariffs May Be Retroactively Imposed!

    Recently, the US Court of International Trade (CIT) made a ruling, determining that the Biden administration's implementation of a two-year "suspension order on import tariffs on solar cells and components from Southeast Asia" was an illegal act. This ruling means that the large-scale importation of low-priced solar products from Southeast Asia (most of which were produced in China) during the period from June 6, 2022 to June 6, 2024 will now face retroactive taxation.

    The core initiators of this lawsuit are Auxin Solar Inc. and Concept Clean Energy Inc. Both enterprises argue in their lawsuit claims that the Biden administration's decision to suspend tax collection exceeded the president's authority, and the measure taken by the Department of Commerce to suspend tariffs was also illegal.

    The plaintiff side emphasized that this tariff suspension order unjustifiably allowed low-priced imported products to enter the US market, causing damage to domestic manufacturing industries.

    Once the court ruling takes effect, the U.S. Customs and Border Protection Agency (CBP) can immediately initiate the retroactive tax collection procedure, imposing a total tax of several hundred billion dollars on solar cells and components imported from Cambodia, Malaysia, Thailand, and Vietnam during the suspension period.

    According to the "Revenue Impact of Retrospective Tariffs on U.S. Solar Imports During the 2022-2024 Tariff Suspension  Period" report released by the Coalition for a Prosperous America in the spring of this year, a conservative estimate shows that this retrospective tariff could bring $54 billion in revenue to the U.S. Treasury. The report also pointed out that the retrospective taxation would provide a fair competition platform for domestic solar manufacturers and alleviate the long-term unfair competition pressure they have faced with Chinese-related imported products, as these products are often supported by subsidies and their prices are artificially lowered. The attorney representing the plaintiffs, Auxin Solar Inc. and  Concept Clean Energy Inc., Thomas Beline, told the media: "This is an unquestionable victory."

    In fact, the main point of contention in this case centers on the legality of the 10414th regulation issued by the federal government. This regulation was issued by the Biden administration and explicitly imposed an emergency suspension of anti-dumping and anti-subsidy taxes on solar cells and components from four Southeast Asian countries for a period of two years. Although the US government had previously preliminarily determined that Chinese enterprises were circumventing existing taxes through Southeast Asian countries, the original intention of issuing the suspension order was to ensure the smoothness of import channels and facilitate the implementation of US solar projects. It is worth noting that Auxin Solar Inc., one of the plaintiffs in this lawsuit, was the first to initiate the "anti-avoidance" lawsuit against Southeast Asian solar products. During the period when the suspension order was in effect, the US Department of Commerce instructed the Customs and Border Protection Agency to suspend the collection of relevant tariffs.

    Now that the plaintiff has won the case, it means that the US government must lift all the tariff suspension measures and impose full retroactive taxation on all imported products that were subject to tariff suspension during the period and whose tariffs have not yet been settled. These tariffs may cause huge losses and uncertainties for importers, developers and utility companies. They had previously used these low-priced equipment for multiple projects, and some of these projects have already been completed. The maximum amount of retroactive taxation could be more than 200% of the value of the imported products.

    Belling said, "For all the affected importers, even according to the current tariff system, this tariff amount is extremely significant." Currently, the defendants and relevant stakeholders in this case have begun to take countermeasures. One is to file an appeal with the US Court of Appeals for the Federal Circuit; the second is to apply for "suspension of tariff collection during the appeal period" to alleviate short-term financial pressure; the third is to push for the cancellation of retroactive tariff collection through political means. It is known that the entities involved in the response include industry associations and leading enterprises, such as the US Clean Energy Association, BYD, ATS, Oriental Solar, and Trina Solar.

    Belling believes that this ruling serves as a warning against "the pursuit of profits blindly during trade disputes". He stated: "During this period, some enterprises were blinded by short-term interests and acted improperly, lowering the product prices to such an extent, which was clearly an unwise choice." He further explained that fundamentally, the court's ruling clarified a principle. The US president has the authority to declare an industrial trade emergency, but has no right to revoke the officially effective tariff collection regulations. The decision to issue the stay order at that time was inherently flawed, and hopes that such situations will not recur.

    Currently, the US Court of International Trade has only released a brief summary of the judgment. The full text of the judgment, which contains non-confidential information, is expected to be officially published in the "Judgment Announcements" section of the court's website this weekend.

    (This article is translated from pv-magazine. Please indicate the source when reprinting.)