In landmark decision, state-to-state USMCA panel finds U.S. tariff on solar products from Canada unlawful

Washington, D.C., 16 February 2022 – In an unanimous decision, a US-Mexico-Canada (USMCA) dispute settlement panel has found that the safeguard tariff imposed by the United States on solar modules from Canada violates USMCA rules.

Canadian Minister of International Trade Mary Ng stated: “It has been made clear today in the [USMCA] dispute settlement panel’s report that tariffs on Canadian solar products are in violation of [USMCA]. Canada will work toward the complete removal of these unjustified tariffs.” The United States has until March 16 (45 days from the panel’s decision) to comply with the panel’s recommendation. Read more on the minister’s statement here.

Hogan Lovells has represented several North American solar companies since 2017 with respect to the safeguard on Canadian imports. The firm also supported the Government of Canada throughout the USMCA dispute, including participating in the panel’s public hearing.

“The panel’s decision is an important victory for our solar industry clients who have made major contributions to the burgeoning North American solar sector,” said Hogan Lovells partner Jonathan Stoel. “Removing the safeguard tariffs on imports from Canada, in accordance with the panel’s decision, will spur increased investment and additional manufacturing jobs in the U.S. solar industry, and will cause more high-quality solar panels to be deployed in the United States for years to come.

"Hogan Lovells is proud to have supported the efforts of the Government of Canada on this dispute, producing a well-reasoned decision by an eminent panel of international jurists. This case shows the strength of the new USMCA dispute settlement rules for state-to-state disputes," Stoel added.

The Hogan Lovells International Trade & Investment team was led by Stoel and counsel Michael Jacobson, and included partners Deen Kaplan and Craig Lewis, senior associates Nicholas Sparks and Nicholas Laneville, and associate Lindsay Brown.


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