The ITC’s new solar report could bolster Trump’s broader trade agenda
There is no domestic requirement under Section 201 to address whether or not a surge of imports is “unforeseen,” but it is a requirement at the WTO, said Clark Packard, trade lawyer and policy analyst for the R-Street Institute, a free market think tank.
“To me, it was a positive sign, because it showed that the administration was taking seriously our obligations abroad,” he said. “One of the things us trade wonks are concerned about, based on what the president has said and some of his actions, is that [the administration was] going to thumb their nose at the WTO and potentially ignore rulings from the WTO. It was a relief, in one respect, to see them take those obligations seriously.”
But it’s unlikely to be a relief to the solar industry. While the Trump team appears to be honoring U.S. trade commitments, requesting the ITC’s supplemental report shows the USTR is preparing for a situation where Trump approves new solar tariffs, which are later challenged at the WTO.
Can tariffs survive WTO scrutiny?
Previous Section 201 cases have been struck down specifically because whatever country imposed safeguard tariffs did not address that the issue was unforeseen, said Packard. And the Trump team knows this.
“They see the writing on the wall,” said Packard. “You can expect a challenge on this from China and Taiwan and some other countries that will be hard hit” by U.S. trade remedies.
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“In the president’s mind, he was envisioning tariffs on steel or automobiles or something like that, but based on the schedule and the way these cases have fallen the first opportunity he’s going to have to impose tariffs will likely be here, on solar products,” said Packard. “My sense is it’s pretty likely they’re going to embrace one of the options that the ITC laid out.”
The solar trade case is “part of a larger narrative,” he added. “I think 2018 will be a year of action and aggressive moves by this administration toward China.”
