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Canadian solar companies challenge Trump’s tariffs in court

Workers at Silfab Solar Inc. manufacture solar panels at the company’s facility in Mississauga, Ont., in this 2011 file photo.

Kevin Van Paassen/The Globe and Mail

Three Canadian solar manufacturers have gone to a U.S. federal court to challenge the Trump administration's recently imposed tariffs on imported panels, saying the trade penalties could force them out of business.

The Ontario companies – Silfab Solar Inc. of Mississauga; Canadian Solar Solutions Inc. of Guelph, and Heliene Inc. of Sault Ste. Marie – have asked the U.S. Court of International Trade for a ruling overturning the tariffs that President Donald Trump announced last month. A hearing date has been set for Feb 26.

Each of the companies manufactures crystalline silicon photovoltaic (CSPV) modules that are used in solar energy panels – both large utility-scale projects and rooftop installations – and each exports a significant portion of its product to the United States.

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The companies' complaint says the tariffs will cause "immediate, severe and irreversible injury" to them.

"That tariff will make it prohibitively expensive for plaintiffs to import CSPV modules from Canada to the United States, and within weeks, it will compel plaintiffs to terminate employees, close manufacturing facilities, forego business opportunities, lose sales, and – in several cases – cease business entirely," an accompanying memo states.

Executives at Silfab and Heliene said they could not comment on the complaint because it is before the courts.

Canadian Solar – controlled by Chinese-based entrepreneur Shawn Qu – did not respond to a request for comment. The Guelph-based company, the only publicly traded company of the three, saw its share price drop from a January peak of US$17.30 prior to Mr. Trump's announcement to close Friday at US$15.73.

The President touted the solar tariffs as part of his administration's push to rebalance the American trade deficit and return manufacturing jobs to the United States. However, the U.S. Solar Energy Industries Association said the tariffs will put a serious dent in their members' business and projected it will cost 23,000 industry jobs, many in the solar-related manufacturing sector.

"This will hurt, not help, manufacturing," association spokesman Don Whitten said.

Several countries – including South Korea, China and Singapore – have filed complaints with the World Trade Organization, arguing the Trump administration's tariffs violated the international agreement. However, that process will take many months to conclude.

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The Canadian companies sought relief from the Court of International Trade, which was established by Congress and is based in New York. The plaintiffs argue the Trump administration violated both the U.S. Trade Act and the U.S. NAFTA Implementation Act when it included the Canadian companies in the tariff measures.

The complaint, filed Feb. 7, argues the administration ignored the findings of the International Trade Commission (ITC), which found that global imports of solar photovoltaic cells were causing injury to U.S. manufacturers. However, the ITC concluded that Canadian companies had only a 2-per-cent share of the market, and did not significantly contribute to the domestic injury. As a result, it did not recommend tariffs against them.

However, in his Jan. 23 announcement , Mr. Trump included Canadian companies in his plan to impose a tariff of 30 per cent, declining over three years to 15 per cent, after which they would be eliminated.

The three solar companies originally focused on the Ontario market after the Liberal provincial government in 2009 passed the Green Energy Act, which includes domestic content requirements. However, that market slowed and they began relying on exports to the United States. They typically import the solar cells from Asia and build them into modules for utility-sized and rooftop installations.

Silfab is one of the largest manufacturers of solar PV modules in North America, with 170 employees at its Mississauga plant. Heliene employed more than 100 workers last year at its factory in Sault Ste. Marie, but that figure dropped to 78 employees in January after President Trump announced the tariffs.

The Canadians "have a sound basis for bringing a case," Los Angeles-based energy lawyer Allan Marks said in an interview. "There was a bit of a mismatch between what the ITC concluded in its injury finding and what the President did."

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When he announced his decision, Mr. Trump made reference to the NAFTA negotiations currently under way between the United States, Canada and Mexico, which was also hit by tariffs on its refrigerator manufacturers.

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