Section 201 testimony to be heard today

Today the International Trade Commission will hear arguments for and against trade action under its Section 201 investigation.

August 15, 2017 Christian Roselund

Suniva, in happier times.

Image: U.S. Department of Energy

There are a lot of people from the solar industry in Washington D.C. today. The U.S. International Trade Commission (ITC), the quasi-judicial body which will decide whether or not to give U.S. President Donald Trump the power to impose trade sanctions of his choosing on solar manufacturers in any nation attempting to export to the United States, will be hearing testimony both for and against this idea.

This includes bankrupt solar cell and module maker Suniva, which initiated the petition, as well as SolarWorld Industries Americas, which joined Suniva’s petition. On the other side will be the United State’s largest solar trade group, Solar Energy Industries Association (SEIA), which has come out strongly against Section 201 and mobilized 69 legislators to this effect. Bloomberg New Energy Finance (BNEF) has also sent its Head of North America research Amy Grace to testify against the petition.

It remains to be seen what the result of all of this testimony will be. It is important to note that the ITC is an independent agency outside of the Department of Commerce. All of its members were appointed by previous presidents, and it has not ruled on a Section 201 case in 15 years, when it found that the U.S. steel industry had been harmed by imports.

The Section 201 process is also very different from the processes that were used to set import duties on Chinese and later Taiwanese solar makers in 2012 and 2014. The process provides something of a loophole to international trade agreements, and the actions that President Trump could take, described as “trade relief”, could apply to manufacturers globally, not just in one or two nations.

This means that moves like building factories in Southeast Asia instead of China, as many Chinese manufacturers did following the imposition of a second set of anti-dumping and anti-subsidy duties in 2014, won’t provide a way around any measures Trump could take.

Accordingly, the ITC itself notes that the bar for finding damage under Section 201 is higher than for anti-dumping or anti-subsidy duties. However it is hard to know what that means in practice, given how rarely Section 201 investigations are held.

The positions of the various parties in the U.S. and global solar industry have been clear, with both sides arguing that jobs are on the line. In addition to the solar industry, various manufacturing trade groups and right-wing think tanks Heritage Foundation and American Legislative Exchange Council (ALEC) have come out against the petition, which in the latter case comes from these organization’s opposition to protectionism, not their love of the solar industry.

It is much harder to read the tea leaves at the ITC, however the agency’s preliminary report has noted that 26 U.S. module makers have shut down in the last five years. At least on their surface such findings give evidence towards a ruling in factor of trade action.

But even as U.S. companies stock up on modules, we at pv magazine consider that calling this one either way would be hubris. And we will be reporting on today’s testimony, as always giving you views from both sides.

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