Nearly half a year after an independent panel said that the Section 201 tariffs were not in compliance with the 2018 Canada-United States-Mexico Agreement (CUSMA), the US government has agreed to lift those tariffs for Canadian-made solar products.
The three countries have signed a memorandum of understanding (MOU) that Canadian Trade Minister Mary Ng said reflects the countries’ shared commitment to combat climate change and develop renewable energy.
The Section 201 tariffs, originally imposed under former President Donald Trump, imposed a 30% duty on all imported solar cells and modules, in an attempt to prop up US manufacturing of those products. In opposing the tariffs, Canadian officials argued that American import levels of Canadian hardware are too low to justify the tariffs. 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.
According to US Trade Representative Katherine Tai, the new deal contains a mechanism to ensure that solar product imports from Canada do not undermine the existing US safeguard measure on imports of solar products. The deal and its terms also apply to Mexican solar manufacturers, but Canadian manufacturers have been notably hit harder by the tariffs, with the United States importing a higher volume of modules from Canada than Mexico.
In February, the Biden administration said that it would extend the Section 201 tariffs on imported crystalline silicon solar panels and solar cells above an annual 5 GW tariff rate quota, thus upholding the exclusion for bifacial panels and doubling the tariff rate quota for cells. The extension was described by the Solar Energy Industries Association (SEIA) as “a balanced solution in upholding the exclusion for bifacial panels and increasing the tariff rate quota for cells.”
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