By Thomas G. Allen, Nathaniel B. Bolin, Nathan H. Carrier, William H. Holmes, KL Gates
Auxin Solar (Auxin) is asking the US Court of International Trade (CIT) to overturn a moratorium that allowed certain solar panels and modules from Southeast Asia to enter the US duty-free between June 2022 and June 2024 (the Moratorium Period). Auxin is asking the CIT to reliquidate all entries during the Moratorium Period—a result that has the potential to impose steep antidumping (AD) and countervailing duties (CV), retroactively, on some panels and modules.
Alternatively, Auxin is asking the CIT to assess AD/CV duties and reliquidate all entries that benefited from duty-free treatment that were imported prior to the Moratorium Period. Under either scenario, the economic impact of retroactive duties could be substantial. Between 2022 and 2023 alone, an estimated US$21 billion in applicable solar cells and modules were imported into the United States from Southeast Asia. In the first half of 2024, the value of the impacted products exceeded US$7 billion.
As the firm wrote about here, there are several contract clauses that might address the risk associated with changes to project economics arising from shifts in US trade policy or changes in law. In addition, some parties may have specifically allocated for the scenario of increased duties associated with the Auxin litigation and a related Department of Commerce (Commerce) investigation into alleged circumvention of antidumping orders. Parties that imported any of the products at issue should consult their contracts to determine whether they address the potentially significant economic impact of a reliquidation order by the CIT.
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