The status of Section 301 tariffs on Chinese inverters

In 2018, the Trump administration imposed Section 301 tariffs on a long list of Chinese goods containing solar inverters and AC modules after finding that “China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable, discriminatory, and burdensome or restrictive. U.S. trade.” The rates started at 10%, but the administration increased them to 25% in 2019.

Chinese inverter manufacturers rushed to devise mitigation strategies to avoid being hit with cumbersome tariffs, including securing backup production facilities outside of China. View SPW’s list of worldwide inverter production locations here.

When the Biden administration took office in 2021, new US Trade Representative Katherine Tai embarked on a major overhaul of China’s trade policy and said she would keep all options open, including launching new investigations under the Section 301 trade law. according to Reuters.

Tai then opened a targeted review of a limited number of imports excluded from the 301 tariffs until the exclusion expired at the end of 2020. According to a Ministry of Foreign Affairs notice, the focus of its evaluation was “whether, despite the imposition of additional duties from September 2018, the specific product will remain available only from China.”

The Office of the United States Trade Representative accepted public comments from October to December 2021, and then planned to “consult and consult with the agencies that make up the Section 301 committee of the various agencies, including the Small Business Administration,” according to the notice.

A bipartisan group of more than 140 lawmakers wrote a letter to Tai on Jan. 20, 2022, asking to expand the range of products eligible for exclusion from the Section 301 tariffs, saying many Americans work in industries that are “struggling to adapt their supply chains as they remain competitive with global competitors.” The solar industry has been hit hard by supply chain issues, with 56% of global utility PV developments scheduled for 2022 at risk of being canceled or delayed due to rising costs of production materials and shipping, according to an analysis by Rystad Energy.

According to a December 2021 letter by the Congressional Research Service, Section 301 actions are automatically terminated after four years unless the USTR receives a request to continue and reviews the case. That timeline would mean that these 301 rates could expire this year without further intervention.

Click here for an update on the Section 232 rates on steel impacting the solar mounting industry.

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