WTO Panel Rejects China’s Solar Safeguard Challenge

September 02, 2021

WASHINGTON – A WTO dispute settlement panel today issued a public report rejecting China’s challenges to the U.S. safeguard tariffs on solar products in the dispute United States – Safeguard Measure on Imports of Crystalline Silicon Photovoltaic Products (DS562).  This is the first successful defense of a general safeguard action before a WTO dispute panel.
“I welcome the WTO panel’s findings rejecting China’s challenges to the U.S. solar safeguard as baseless,” said Ambassador Katherine Tai. “The Biden-Harris Administration is committed to ensuring America’s role in resilient clean energy supply chains as part of the Build Back Better agenda. We must make historic infrastructure investments that unlock the full potential of solar power and create good-paying jobs in cutting-edge fields that will help address the climate crisis.”

In early 2018, the United States imposed the solar safeguard measure to support the domestic solar industry’s efforts to adjust to import competition primarily attributable to excess solar cell and module capacity by Chinese producers in China and around the world and exacerbated by China’s non-market practices.  The safeguard was established after the U.S. International Trade Commission (USITC) found that the domestic solar industry was being seriously injured by increased imports.  The safeguard imposes a tariff-rate quota on imports of cells and a tariff on modules over a four-year period currently set to expire on February 6, 2022.  Domestic producers have asked the USITC to review a safeguard extension.  That review is ongoing.

In July 2019, China requested the establishment of a WTO panel alleging that the U.S. imposition of the safeguard was inconsistent with various obligations under the General Agreement on Tariffs and Trade 1994 and the WTO Agreement on Safeguards.  The Panel rejected all of China’s claims.  

Specifically, the Panel found that the United States established that solar imports had increased as a result of unforeseen developments, established a causal link between increased imports and serious injury to the domestic industry, and appropriately considered other factors besides increased imports that were allegedly causing injury to the domestic industry.  The full report on the WTO panel’s decision is available here.