Canada has requested a dispute settlement panel regarding US safeguard tariffs on solar products from Canada after failing to resolve the issue through consultations.
The request was made under Chapter 31 of the Canada-United States-Mexico Agreement (CUSMA) on 22 December 2020. Under CUSMA timeframes, the panel would be expected to issue a report on the topic by early 2022.
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Since the tariffs of 18% were imposed in early 2018, Canadian exports of solar products to the US have plummeted by 82%.
“These tariffs are unwarranted and damaging to the global competitiveness of our long-established, secure, and deeply integrated supply chains,” said Mary Ng, Canadian minister of small business, export promotion and international trade.
“Canada and the United States share a long-standing mutually beneficial relationship, and our ongoing partnership will contribute to a strong, sustainable recovery, and benefit workers and businesses on both sides of the border,” she added.
US tariffs were placed on crystalline silicon photovoltaic cells manufactured in Canada, whether fully assembled into other products or not. The US International Trade Commission (USITC) first set 30% tariffs in May 2017, with rates gradually reducing to the 18% today.
The USITC’s original report to US authorities in 2017 stated Canadian imports were not substantial and did not cause serious harm to US interests. Nevertheless, the Trump administration imposed the tariffs, resulting in legal action taken by Canadian solar manufacturers.
More recently, the Solar Energies Industries (SEIA) asked president Biden to remove the tariffs as one of six key energy policy priorities for the new administration.
SEIA said that tariffs of solar products meant the cost of panels in the US is roughly 50% higher than the global average.