Yesterday, President Trump announced his decisions on two high-profile trade cases brought under Section 201 of the Trade Act of 1974, which authorizes import restraints to protect domestic industries that are seriously injured by imports. These cases, which involve solar panels and washing machines from a variety of countries, are the first affirmative actions under this statutory provision since 2002.
In the solar panel case, the President announced increased tariffs for four years, starting at 30 percent and declining five percent per year over the relief period. These tariffs are lower than those sought by the two domestic petitioners in the case, Solar World and Suniva. The sting of the tariffs is softened further by the exemption from additional duties for the first 2.5 gigawatts of solar panels that are imported each year.
In addition to announcing duties on solar panels and cells, the President’s announcement addressed a long-running dispute involving polysilicon imports into the U.S. and China. Both countries have antidumping and countervailing duties on imports from one another—and the Chinese imposition of tariffs was clearly unjustified retaliation for the U.S. case. The U.S. producers of polysilicon have sought negotiations to eliminate the restraints in both markets, so the inclusion of the commitment by the Administration to seek a solution to this problem was warmly received by the domestic producers.
The washing machine tariffs had a similar structure as the solar tariffs, but relief will only extend for three years. The first 1.2 million imports of finished washers will face 20 percent duties, declining to 16 percent over three years. Imports over 1.2 million units will face 50 percent duties, as will parts. The exemption for parts starts at 50,000 units and increases to 90,000 over three years.
While it appears that the import relief for Whirlpool, the main U.S. company behind the washing machine case, appears more effective than the relief for the solar panel producers, imports and retailers of both products have expressed concern about the prospect of rising prices for their products.