Speculation on lawsuit against Biden’s two year tariff pause

ROTH Capital believes that Auxin Solar – the company that filed the 2022 anti-circumvention lawsuit – is readying a new series of lawsuits. The lawsuits are aimed at reinstating two year suspension of liquidation of – which leaves the window open for collection of duties in the future – on companies that were found to be circumventing the 2012 tariff ruling.

The companies – or their subsidiaries – found in violation were: BYD, Longi, Canadian Solar, and Trina. ROTH speculated that these companies were found to be both importing solar cells made from Chinese solar wafers, and buying at least three of six subcomponents (silver paste, aluminum frames, glass, backsheets, ethylene vinyl acetate sheets, and junction boxes) from Chinese manufacturers. However, other sources have suggested it’s a much more nuanced decision to determine exactly which companies were considered circumventing.

Companies found to not be in violation of the ruling would not be affected by this lawsuit.

ROTH Capital asked K&L Gates LLP partner Stacy J. Ettinger what she thought about the lawsuit’s potential for success, and what that process might look like. That webinar can be accessed here.

Ettinger said that it will mostly likely be a two part process, with each part having its own chance of success. The first required action would be a Temporary Restraining Order against the suspension of liquidation, which may be coupled with a request to reinstate cash deposits. Ettinger believes Auxin has a “50/50 shot” of obtaining the restraining order, but only a 10% chance of winning the request to reinstate cash deposits. After that, the case would move toward a request for a Preliminary Injunction.

If the temporary restraining order were to be removed, that would open the door for the reinstatement of tariffs on the circumventing companies’ solar panels. Ettinger confirmed to Roth that there is no risk of retroactive tariffs on imports between April 1, 2022 and the start of the tariff waiver on June 6, 2022.

It was suggested that once the suit is filed, determination on the restraining order could come quickly, within two weeks. However, other legal actions would have to go through a longer process.

This article was amended on Dec. 16, 2022 to clarify that ROTH speculated that four companies were importing and buying from Chinese manufacturers, rather than that they had been found doing so.