Canada wins USMCA trade dispute with the US, aims to ensure ‘full benefit’ for its solar industry

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
The Trump administration imposed tariffs on Canadian solar products even as the US International Trade Commission found the country was not a threat to US manufacturing. Image: Unsplash

A dispute resolution panel has ruled that tariffs on Canadian solar products imposed in 2018 by the US contravene the terms of the US-Mexico-Canada Agreement (USMCA) on trade, with Canada now keen to reap the benefits for its solar industry.  

Mary Ng, Canadian minister for International Trade and Export Promotion, said the ruling in favour of Canada “unequivocally confirmed that US tariffs on Canadian solar products are unjustified and in violation of USMCA”.

“Canada will also ensure that our solar industry, as well as all Canadian industries and workers, can fully benefit from USMCA,” she added.

In 2018, and despite the US International Trade Commission (USITC) finding that Canada was not a major exporter of solar products to the US and did not qualify for the tariffs, the Trump administration imposed the Section 201 tariffs on imports from Canada starting at 30% and declining each year.

This resulted in legal action taken against the Trump administration by solar manufacturers, with Canada noting how its solar exports to the US plummeted by 82%.

Canada requested the dispute settlement panel after failing to resolve the issue through private consultations. It was expected to rule around this time.  

Following the ruling, the US has 45 days to reach an agreement with Canada and resolve the dispute.

“We welcome the US’ intention to pursue a resolution with Canada and Mexico, as indicated by the President in his recent announcement,” said Ng, adding that “Canada will work toward the complete removal of these unjustified tariffs.”

A US Trade Representative (USTR) spokesperson said the US benefited from aspects of the panel’s decision.

“The US appreciates that the panel reaffirmed the President’s authority to make exclusion determinations in safeguard proceedings,” USTR spokesman Adam Hodge said in a statement.

“We will continue to review the report and work with Canada to resolve the dispute.”

In reality, the Section 201 tariffs were designed to protect US solar manufacturing from cheaper Chinese competition, which made Canada’s inclusion even more puzzling, especially considering the USITC’s findings.

China challenged the decision, requesting a dispute panel with the World Trade Organisation (WTO), although this was rejected on grounds that Chinese manufacturing did present a threat to the US’ domestic industry. China is appealing that decision.

More recently, the tariffs, which were due to expire on 6 February, were extended by the Biden administration on 4 February. Crucially, they continued an exemption for bifacial solar modules – that make up the vast majority of module imports to the US – and doubled the tariff rate quota for cell imports.

The change was welcomed by the US solar industry, with the Solar Energy Industries Association (SEIA), which strongly opposed the tariffs, noting that bifacial panels are still not available “at scale” from US manufacturers.

China was predictably unhappy with the news and said the tariff extension would “distort international trade”.

14 June 2022
Join us in Napa to unlock the key to reliable PV module supply to the U.S. market in 2022 & 2023. We'll also be gathering the main players in the US solar market for some wine tasting!

Read Next

May 16, 2022
JinkoSolar, Trina Solar and Hanwha Q CELLS are among eight PV manufacturers that have been selected by the US Department of Commerce (DOC) to provide further information on their operations as part of the agency’s ongoing tariff circumvention investigation.
May 16, 2022
The world added record amounts of renewable energy last year with 295GW of capacity deployed, up 6% year-on-year, despite supply chain constraints, project delays and high commodity prices, according to the International Energy Agency (IEA), which also expects nearly 320GW to be deployed this year.  
May 13, 2022
Retail giant IKEA has partnered with US residential solar installer SunPower to offer home PV solutions in the US.
May 11, 2022
Canadian module manufacturer Heliene has seen unprecedented demand for its modules following the US Department of Commerce’s (DOC) decision to investigate alleged anti-dumping and circumvention (AD/CVD) by solar manufacturers in Thailand, Vietnam, Malaysia and Cambodia, which continues to spread chaos across the US solar sector.
May 11, 2022
solar tracker manufacturer FTC Solar has withdrawn its guidance for the year and warned of material uncertainties caused by the US AD/CVD investigation.
PV Tech Premium
May 11, 2022
PV Tech Premium speaks with BIPV company SunStyle about their expansion into the US market and how they believe the time is right for the technology in the US.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
June 14, 2022
Napa, USA
Solar Media Events
October 4, 2022
New York, USA