The Canada-United States-Mexico Agreement (CUSMA) found that Section 201 tariffs were not in compliance with the terms of the international agreement, according to an independent panel.
The panel said that import levels are too low to justify the tariffs, and therefore gave the recommendation for termination. The Biden administration recently extended the tariffs for another four years. Alterations to the 201 tariffs included an increased 5GW tariff rate quota, and an exclusion for bifacial panels.
In negotiations, the US sent a trade representative to attempt to suspend the CUSMA agreement, which has now made its recommendation. The United States has until March 16th to eliminate the tariffs.
Two companies set to benefit from the ruling are Heliene and Silfab Solar, both Canadian module producers that export to the US. Since the Section 201 imports were put in place in 2018, Canada to US solar panel trade has decreased as much as 82%, said the Canadian government.
“Canada’s long-standing and close collaboration with the United States on cross-border trade and supply chains is critical to supporting our shared economic recovery, fighting climate change, and ensuring our long-term growth and competitiveness,” said Mary Ng, Canadian Minister of International Trade.
Ng said Canada will work toward the complete removal of the “unjustified” tariffs.
US manufacturing push
Tariffs are seen as one way the US attempts to encourage domestic manufacturing. In another push for US fabrication, House Representative Val Demings (D-FL) introduced the Reclaiming the Solar Supply Chain Act in September. It would allocate $3.5 billion to US solar manufacturing.
The proposed act won support from groups like the Sierra Club, the Environmental Defense Fund, and the Ultra Low Carbon Solar Alliance (ULCSA). ULCSA director Michael Parr said too many solar panels and other components are made in global supply chains with high carbon emissions, and that supporting domestic manufacturing can leverage American innovation and low-carbon manufacturing processes.
In November, the US passed the Solar Energy Manufacturing for America Act, sponsored by Sen. Jon Ossoff (D-GA). The act includes numerous tax credits for US solar fabs.
An earlier proposal Build Back Better Act also had provisions for US manufacturing. Included in the bill was an incentive for the manufacture of thin film PV or crystalline PV cells. The incentive would pay $0.04 per watt DC capacity of the cell. PV wafers would be offered $12 per square meter, and solar-grade polysilicon is offered $3 per kilogram U.S.-made solar modules are offered an incentive of $0.07 per watt. The bill also had incentives for the manufacture of trackers, purlins, fasteners, inverters, and other balance-of-system components.
The BBBA was halted in December, when Sen. Joe Manchin pulled back his must-have vote in a last-minute surprise to the nation.
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