New 'Section 201' Tariffs for US Imports

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January 30, 2018 - Beginning on February 7, 2018, imports of solar cells and large residential washers will fall under the scope of the safeguard duties and will be subject to tariff-rate quotas (TQR) that will remain in effect for several years, unless modified.

A tariff-rate quota (TRQ) is a trade policy tool used to protect a domestically-produced commodity or product from competitive imports. 

A safeguard is a restraint on international trade or economic development to protect communities from development aggression or home industries from foreign competition. Safeguard tariff increases are in addition to applicable normal duty rates and any AD/CVD rates in effect.

In-Scope Products:
Solar Cells (CRYSTALLINE SILICON PHOTOVOLTAIC CELLS):
(a) solar cells, whether or not assembled into modules or made up into panels provided for in subheading 8541.40.60;
(b) parts or subassemblies of solar cells provided for in subheadings 8501.31.80, 8501.61.00, and 8507.20.80;
(c) inverters or batteries with CSPV cells attached provided for in subheadings 8501.61.00 and 8507.20.80; and
(d) DC generators with CSPV cells attached provided for in subheading 8501.31.80.
Large Residential Washers:
(e) washers provided for in subheadings 8450.11.00 and 8450.20.00;
(f) all cabinets, or portions thereof, designed for use in washers, and all assembled baskets designed for use in washers that incorporate, at a minimum, a side wrapper, a base, and a drive hub, provided for in subheading 8450.90.60;
(g) all assembled tubs designed for use in washers that incorporate, at a minimum, a tub and a seal, provided for in subheading 8450.90.20; and
(h) any combination of the foregoing parts or subassemblies, provided for in subheadings 8450.90.20 or 8450.90.60.

Trade now awaits the USITC to publish in the Federal Register further guidance on tariff updates and procedures through which parties may request an exclusion.

If you are importing these items into the US and have questions, please contact the BDP Corporate Compliance Team: bdp-compliance@bdpint.com

About Section 201
Under section 201, Trade Act of 1974 (Global Safeguard Investigations) domestic industries seriously injured or threatened with serious injury by increased imports may petition the USITC for import relief. The USITC determines whether an article is being imported in such increased quantities that it is a substantial cause of serious injury, or threat thereof, to the U.S. industry producing an article like or directly competitive with the imported article. If the Commission makes an affirmative determination, it recommends to the President relief that would prevent or remedy the injury and facilitate industry adjustment to import competition. The President makes the final decision whether to provide relief and the amount of relief. Section 201 does not require a finding of an unfair trade practice, as do the antidumping and countervailing duty laws and section 337 of the Tariff Act of 1930. However, the injury requirement under section 201 is considered to be more difficult than those of the unfair trade statutes. Section 201 requires that the injury or threatened injury be "serious" and that the increased imports must be a "substantial cause" (important and not less than any other cause) of the serious injury or threat of serious injury. Criteria for import relief under section 201 are based on those in article XIX of the GATT, as further defined in the WTO Agreement on Safeguards. Article XIX of the GATT is sometimes referred to as the escape clause because it permits a country to "escape" temporarily from its obligations under the GATT with respect to a particular product when increased imports of that product are causing or are threatening to cause serious injury to domestic producers. Section 201 provides the legal framework under U.S. law for the President to invoke U.S. rights under article XIX.

Sources: USITC and Presidential Proclamation

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