The Trump administration has refused to accept European Union alternatives to U.S. safeguard tariffs on imported solar products, according to a joint statement issued by the World Trade Organization.
Safeguard measures are permitted under WTO rules if a country faces serious injury due to a surge in imports of a particular product. However, the country implementing the safeguards must compensate their trading partners in other areas, or accept that other countries can put up their own barriers.
In response to the Section 201 solar trade case, China, Taiwan, South Korea, Malaysia and the EU demanded compensation after President Trump signed the tariffs into law on January 22.
Imposing a 30 percent tariff on foreign-made solar cells and modules was one of the first trade actions the Trump administration took as part of a broader protectionist agenda.
The EU asserted that European solar imports were not causing the U.S. solar manufacturing industry any serious injury "due to their volume and higher prices,” the WTO filing states.
"Thus, it suggested a form of measure that would be less penalizing for European Union imports such as a quota allocated by country or a minimum import price," the filings says. "The United States did not agree with this."
"In addition, there was no agreement on the form of compensation,” according to the joint statement.
Washington’s rejection of the EU request opens the door for retaliatory measures, although both parties agreed to “monitor the impact of the measures on trade flows” and to continue trade discussions. Separately, EU ProSun, a group representing 80 percent of European solar cell and module production, has submitted a request with U.S. trade representatives for an exclusion from the solar tariffs.
The U.S. and Taiwan are also continuing to engage in a dialogue over the solar safeguard tariffs, but determined that Taiwan can impose compensatory measures starting in 2022 if no agreement is reached, according to another WTO filing.
The threat of trade retaliation from other countries played a role in encouraging the U.S. to remove import tariffs on imported steel products in a Section 201 case decided in 2002.
The EU is already considering tariffs on American whiskey, blue jeans and additional products in response to new trade action Trump announced on imported steel and aluminum.
The U.S. president formalized a 25 percent tariff on foreign-made steel and a 10 percent tariff on foreign-made aluminum on March 8. Those tariffs are expected to take effect Friday.