Invalidation of Solar Tariff Moratorium Stayed Pending Appeal

A recent US Court of International Trade ruling—now on appeal to the Federal Circuit—threatens to impose retroactive duties on importers of solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam that were imported in the moratorium period between June 2022 and June 2024.

In late August, the US Court of International Trade overturned a US Department of Commerce rule that allowed duty-free entry of solar cells and modules between June 2022 and June 2024. Auxin Solar, a US solar producer, and Concept Clean Energy (CCE), a US solar structure designer, challenged the rule, claiming adverse effect—Auxin Solar because it could not make cells and panels to compete with imported merchandise and CCE because it would not be able to obtain CSPV products domestically for domestic use.

The CIT’s decision overturning the DOC rule has been appealed to the Federal Circuit and the CIT’s order has been stayed pending appeal, meaning no additional duties are being collected at this time.

If the CIT’s decision is affirmed, importers may face significant additional duties on products that were imported between June 2022 and June 2024 with the understanding that those products would receive duty-free treatment. More broadly, the landscape for imported solar cells and modules remains in flux while US producers continue to rely on imported modules to meet demand for solar installations.

BACKGROUND

For further analysis on this case, we invite you to revisit our previous publication Solar Companies Take Tariff Arguments to the Courts.

Since 2012, DOC has administered antidumping and countervailing duty (AD/CVD) orders on Chinese-origin Crystalline Silicon Photovoltaic (CSPV) cells and modules. [1] At Auxin Solar’s request, DOC opened an inquiry in April 2022 to determine whether imports of CSPV cells and modules produced in Cambodia, Malaysia, Thailand, and Vietnam (the “subject countries”) circumvented the existing China AD/CVD orders by incorporating parts and components from China. At that time, imports from subject countries accounted for approximately 80% of supply in the United States, and upon initiation of the circumvention inquiry the market ground to a halt.

President Biden issued Presidential Proclamation 10414 in June 2022 declaring a public emergency pursuant to 19 USC § 1318(a) due to the threat of insufficient electricity generation capacity available to meet expected domestic demand (the Proclamation). [2] Section 1318(a) provides that the president may authorize the secretary of the treasury to regulate “the importation free of duty of food, clothing, and medical, surgical, and other supplies for uses in emergency relief work” (emphasis added).

The Proclamation found that a “robust and reliable electric power system is . . . not only a basic human necessity, but [] also critical to national security and national defense.” It further found an “acute shortage of solar modules and module components” and determined that “[i]mmediate action is needed to ensure . . . access to a sufficient supply of solar modules to assist in meeting our electricity generation needs.” The Proclamation authorized DOC to take action to provide relief from the emergency by allowing the duty-free importation of CSPV cells and modules from the subject countries.

In September 2022, DOC implemented the Proclamation in a final rule (the Duty Suspension Rule), which granted duty-free treatment to imports of CSPV cells and modules from the subject countries as of June 2022. [3] DOC instructed US Customs and Border Protection (CBP) to discontinue the suspension of liquidation and the collection of cash deposits and liquidate “Applicable Entries” of cells and modules.

The declared emergency expired on June 6, 2024, at which point the relevant imports of CSPV cells and modules once again became subject to duties pursuant to AD/CVD orders. The rule also included a requirement that the imported CSPV cells and modules be utilized by December 6, 2024 in an effort to prevent stockpiling cells and modules from the subject countries.

In December 2022, DOC issued an affirmative Preliminary Determination, finding circumvention of the China Orders in each of the subject countries. [4] However, pursuant to the Duty Suspension Rule, DOC directed CBP to discontinue the suspension of liquidation and collection of cash deposits for certain entries, provided that importers and exporters could make appropriate certifications.

In light of the Proclamation, AD/CVD-free entry proceeded under the broad “Applicable Entry” certification (Appendix IV). DOC also provided a certification related to the component content of the merchandise (Appendix VI), effectively certifying that the imported cells and modules were outside the scope of the circumvention order. An additional certification provided for certain producers and exporters found not to have been circumventing the China Orders. Importers could file one certification as a standalone or in combination with other certifications.

DOC issued its Final Determination in the circumvention proceeding in August 2023, concluding that the CSPV cells and modules were circumventing the AD/CVD orders, but allowing importers to file certain certifications to avoid the imposition of AD/CVD. In its final determinations, DOC continued the certification process for Applicable Entries as well as for component content and for identified producers and exporters. Entries for which one or more valid certifications were submitted were not subject to AD/CVD pursuant to the circumvention proceeding.

AUXIN SOLAR AND CCE CHALLENGE THE DUTY SUSPENSION RULE

In December 2023, Auxin Solar and CCE filed a complaint in the CIT alleging that 19 USC § 1318(a) does not authorize the duty-free importation of CSPV cells and modules and that DOC and CBP unlawfully failed to suspend liquidation and require a cash deposit of estimated duties following a preliminary determination of circumvention for imports from the subject countries.

The plaintiffs alleged, among other things:

• CSPV cells and modules do not fall under the statutory categories of goods eligible for duty-free treatment (i.e., “food, clothing, and medical, surgical, and other supplies”)
• DOC exceeded its authority by extending duty-free treatment to goods that had been imported prior to the Proclamation
• DOC exceeded its authority by granting duty-free treatment to goods based on certifications that the goods would be used within 180 days of termination of the emergency

In July 2024, the plaintiffs filed a Motion for Judgment on the Agency Record, which the court granted in August 2025. The court held that 19 USC § 1318(a) does not authorize the duty-free importation of CSPV cells and modules because those items do not constitute “food, clothing, and medical, surgical, and other supplies for use in emergency relief work,” as the language “other supplies” should be read narrowly to mean other supplies that are similar in nature to, or share common attributes with, “medical” or “surgical” supplies. The court declined to reach the plaintiffs’ additional claims.

The court then vacated the Duty Suspension Rule, ordering defendants to publish notice of the rule’s vacatur in the Federal Register within 20 days. It also granted the plaintiffs injunctive relief and ordered the defendants to liquidate and collect AD/CVD duties on unliquidated entries circumventing the duty orders on CSPV products from China. The court also provided for the reliquidation of any entries liquidated prior to the judgment, directing the government to collect any associated AD/CVD duties.

On September 5, 2025, the defendants moved the CIT to alter or amend the judgment, requesting a 47-day extension of the deadline to publish notice of the rule’s vacatur in the Federal Register, which was granted on September 8, extending the deadline to publish notice of the vacatur to October 28, 2025. The private defendant-intervenors appealed the decision to the Court of Appeals for the Federal Circuit and moved to stay the CIT’s order pending appeal.

The defendant-intervenors also seek suspension of liquidation for any unliquidated entries covered by the CIT’s judgment. While the US government did not join the private defendant-intervenors in their appeal or request for stay, the motion is unopposed and the government consented to a stay pending appeal. This is perhaps unsurprising given the moratorium was initiated by a prior administration and the collection of tariffs has been a cornerstone of the current administration’s trade policy.

TAKEAWAYS

The CIT ruling threatens to impose retroactive duties on importers of solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam that were imported in the moratorium period between June 2022 and June 2024. The economic impact could be substantial, with estimates of duty impact exceeding $53 billion.

Importers who relied on the moratorium to file “applicable entry” certifications (Appendix IV) will not be affected by the ruling if they also filed certifications that the producer or exporter was not circumventing (Appendix V) or that the component content was outside of the identified scope (Appendix VI).

It remains unclear whether DOC will allow for any process for those who could have submitted additional certifications but did not at the time because they relied on the moratorium certification. For now, companies are advised to coordinate with their producers and exporters to file certifications and monitor the liquidation status of their entries to ensure any products that are outside the scope of the orders are not subject to AD/CVD.

Parties should also review their contracts for imports affected by the moratorium and this case to be prepared for possible disputes regarding tariff liability should the CIT’s ruling be affirmed. Provisions that specify allocation of risk and responsibility for taxes, duties, tariffs, and fees will be informative, as well as any specific tariff payment obligations and indemnification for tariff payments. See our prior LawFlash concerning addressing tariff-related risks in commercial contracts.

US producers remain dependent on imported modules to meet demand for US solar installation. Between the CIT decision and the ongoing litigation around the US administration’s tariff strategy, the landscape for imported solar cells and modules remains in flux. It continues to be important for parties to understand the allocation of risk and responsibility when importing merchandise to be best positioned in this uncertain trade climate.