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NO MORE SIMA DUTIES ON CHINESE SOLAR

CITT RESCINDS LONGSTANDING TARIFFS ON CHINESE PHOTOVOLTAIC MODULES

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The Canadian International Trade Tribunal (“CITT”) recently announced that it is terminating its expiry review (“Review”) on the dumping and subsidizing of photovoltaic modules and laminates (i.e., “Solar Panels”) from China. As a result, the CITT is rescinding its anti-dumping and countervailing orders because it “is of the opinion that the expiry review is no longer supported by domestic producers”. (You can read our earlier blog on the initiation of this Review here.)

Below, we explain what this rare termination means and its significant implications for the Canadian solar industry.

A Rare CITT Decision

Reviews are conducted pursuant to the Special Import Measures Act (“SIMA”) by the CITT with the investigative assistance of the Canada Border Services Agency (“CBSA”). The goal of a Review is to determine if Anti-Dumping Duties and/or Countervailing Duties (collectively, “SIMA Duties”) currently in place remain necessary to protect the domestic market.

The CBSA and CITT each have a role: the CBSA determines whether dumping or subsidizing is likely to resume without continued SIMA Duties, while the CITT determines whether that resumption will cause material injury to domestic producers.

It is exceptionally rare for the CITT to terminate a Review and allow an anti-dumping order to expire. What makes this termination particularly unusual is that the CBSA had already completed its part of the Review and concluded that the dumping and subsidizing of solar goods originating in or exported from China likely WILL take place without continued SIMA Duties.

Despite this likelihood of resumed dumping, the CITT cannot maintain duties without a finding of injury to the domestic industry. Therefore, the lack of support from domestic producers forced the CITT to terminate the review and pull the plug on these SIMA Duties.

The Rescinded ADDs / CVDs

The CITT first imposed SIMA Duties on Chinese-origin Solar Panels in 2015 and renewed them after its first Review in 2020. As is common with SIMA Duties, these duties on Solar Panels were significant – some more than 150%. Accordingly, they had a massive impact on the Canadian solar market.

With the rescission of these SIMA Duties, foreign producers and Canadian importers will benefit from a significant re-opening of the market, as Chinese-origin Solar Panels can now be imported without the prohibitive duties. For renewable energy developers, installers, and consumers, this could eventually translate to lower costs for solar projects across Canada.

Conversely, for domestic solar manufacturers, the removal of this pricing shield will fundamentally alter the competitive landscape.

Takeaways

The CITT has terminated its Review and rescinded the long-standing SIMA Duties on Solar Panels from China. This is a very rare occurrence, especially given the CBSA’s conclusion that dumping and subsidizing were likely to resume. Ultimately, the lack of support from domestic producers forced the CITT’s hand.

Because these duties are now rescinded, this will have a huge impact on the entire Canadian solar industry, significantly lowering barriers for imports.

Contact Experienced Trade Counsel if you need help navigating SIMA issues, mitigating regulatory risk, or understanding how the rescission of these trade protections will impact your business.

For help with SIMA issues, please click here.