Tariffs violate NAFTA and the Trade Act, Canadian companies tell court

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You thought the Section 201 fight was over just because President Trump imposed tariffs on imported solar modules? Ha!

The latest salvo in what is quickly threatening to become an international trade war is a lawsuit filed Wednesday by three Canadian solar manufacturers, who say the tariffs – announced on Jan. 23 – are illegal because:

  • the International Trade Commission’s concluded Canadian imports aren’t harmful;
  • they violate a NAFTA prohibition on quantitative import restrictions; and
  • Trump did not demonstrate the high bar needed to impose tariffs on NAFTA countries.

Silfab Solar, Heliene and Canada Solar Solutions say their products should be exempt from the tariffs because they violate the Trade Act and the North American Free Trade Agreement (NAFTA), under which their products are protected

“Because the proclamation is unlawful as applied to plaintiffs, and inflicts grave and irreversible harms on them, plaintiffs seek a declaration that the proclamation violates the Trade Act and the NAFTA Implementation Act and an injunction prohibiting its enforcements against plaintiffs,” they wrote in their more than 600-page complaint.

The lawsuit, filed the U.S. Court of International Trade in New York this week, is fifth legal action taken in an attempt to get relief from the tariffs, though it is the first known action to be filed within the United States itself.

South Korea, Taiwan and the European Union and China currently have challenges to the tariffs pending before the World Trade Organization.

The flurry of complaints and lawsuits have come on the heels of President Donald J. Trump’s decision to impose a graduated series of tariffs on imported solar modules and cells, starting at 30% this year and gradually being reduced each year of the next four years.

No matter what the outcome of the complaints and lawsuit, the tariffs will have to be reviewed at the end of their current four-year schedule.