A Judge Just Did What Biden Wouldn't: Dump Some Trump Tariffs

Instead of taking his own actions to undo an unlawful order from the former chief executive, President Joe Biden had the government's attorneys argue in favor of even greater trade powers for the White House.

A federal judge on Tuesday struck down some tariffs imposed by former President Donald Trump on imported solar panels, finding that Trump had clearly overstepped his authority by hiking those tariffs last year.

What's perhaps more interesting than the specifics of the trade dispute is the fact that the ruling by Judge Gary Katzmann of the U.S. Court of International Trade was made over the objections of the Biden administration, which defended Trump's actions in court and sought to have the case dismissed. Instead of undoing an unlawful order from the former chief executive, President Joe Biden had the federal government's attorneys argue in favor of even greater, unilateral trade powers for the White House.

That may not be surprising if you've been paying attention to trade policy during the past year, but it serves as yet another worrying reminder of the continuity of poor trade policies between the current administration and its predecessor.

In October 2020, Trump issued a proclamation that imposed new tariffs on some crystalline silicon photovoltaic cells (CSPV), a specific type of solar panel component which had been exempted from Trump's 2018 order imposing tariffs on a wide range of solar panels and parts. At the same time, Trump made changes to those previously imposed solar panel tariffs so that they would decline from 20 percent to 18 percent in February of this year, rather than to 15 percent as originally intended.

Revoking the exemption for CSPV cells, the Trump administration said at the time, was necessary because allowing those parts to be imported tariff-free had "impaired and is likely to continue to impair the effectiveness of" the other solar panel tariffs. Competition from "low-priced imports," the Trump administration said, would limit the growth of America's own solar panel manufacturing industry.

In court documents, the Biden administration defended Trump's actions on the grounds that the previous administration was merely trying to close a "loophole" in the earlier tariff rule.

Katzmann ruled against both Trump and Biden on Tuesday. By adding new tariffs and changing the scheduled tariff rates established in 2018, the judge said, Trump's October 2020 proclamation "constituted both a clear misconstruction of the statute and action outside the President's delegated authority."

The technical violation that Trump committed has to do with Section 201 of the Trade Act of 1974, which gives presidents the unilateral authority to impose tariffs for explicitly protectionist reasons. But once tariffs are imposed, presidents are not allowed to hike those tariffs for at least three years—though there is some wiggle room for presidents to reduce them within the three-year window. That provision seems specifically crafted to prevent presidents from using tariffs as a sort of negotiating threat in the way that Trump often did, and it is also meant to provide some stability to businesses affected by the new import duties.

Trump's October 2020 order plainly violated that part of the 1974 law. "Neither the statute nor the statutory scheme supports interpreting Section 204…to permit increased restrictions on trade," Katzmann wrote in his ruling. As a result, the changes Trump ordered in October 2020 have to go, but the underlying 15 percent tariffs will remain in place.

"Both actions were an unlawful attempt to harshen the Section 201 tariffs," Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, a trade association that filed the lawsuit against Trump's October 2020 declaration, said in a statement praising Katzmann's ruling.

It is telling for two reasons that the Biden administration sided with the Trump administration in this case.

First, had the feds prevailed, the case could have confirmed a new avenue for Biden (and subsequent presidents) to unilaterally fiddle with tariff and tariff rates in an ongoing way. It is yet another example of how the Biden administration is seeking to cement Trump's executive overreach on trade as the new status quo—in much the same way as the Biden administration is aiming to use Trump's warping of the idea of "national security" tariffs for its own ends.

Second, there's an obvious tension between government lawyers defending a policy that was originally imposed to prevent the import of cheaper solar panels and Biden's own climate change policies. If America is going to meet Biden's goals for emissions reduction by 2030, the country will probably need to install a lot more solar panels. It shouldn't matter where those solar panels are made, and the cheaper they are, the more consumers will be able to afford to buy.

It makes little sense for the Biden administration to be defending the Trump administration's protectionist policies. Thankfully, this time both administrations failed in court.