The United States Federal Circuit has overturned a Court of International Trade (CIT) decision to allow the White House to expand safeguard tariffs on solar equipment.

The unanimous decision by a three-judge panel has directed the CIT to affirm the President’s authority under the Trade Act of 1974 to increase safeguard duties.

The case hinged on the wording in Section 2254 of the Trade Act that says safeguard tariffs “may be reduced, modified, or terminated” by the President. The court acknowledged the executive’s authority to interpret statutes.

The case originated in 2018 when the then President Trump implemented safeguard measures, including Proclamation 9693, imposing duties on solar module imports into the U.S. Starting at 30%, these duties were scheduled to decrease annually to 25%, 20%, and finally 15% in their fourth year.

The controversy arose when importers of bifacial solar modules sought exclusion from these duties. Bifacial solar modules faced uncertainty as the U.S. Trade Representative initially granted and then reversed an exclusion.

In October 2020, Trump issued a proclamation to withdraw the exclusion for bifacial solar modules and increase the fourth-year duty rate from 15% to 18%. Importers of bifacial solar modules challenged the proclamation, arguing that the statute only permitted trade-liberalizing modifications.

In November 2021, CIT overturned the administration’s decision to allow the reimposition of tariffs on imported bifacial solar panels. The trade court sided with the Solar Energy Industries Association and solar importers Invenergy Renewables and EDF Renewables, agreeing that the statutory authority to “modify” safeguard measures was limited to trade-liberalizing changes.

However, in its ruling, the three-judge Federal Circuit held that the President did not commit any significant procedural violations of the Trade Act.

“Our sole inquiry is whether the President’s interpretation, that he is permitted to make trade-restricting modifications and not just trade-liberalizing ones, is a clear misconstruction of the statute. Applying this standard of review, we hold the President did not clearly misconstrue Section 2254(b)(1)(B),” said U.S. Circuit Judge Leonard P. Stark while reversing the CIT decision.