A U.S. judge overseeing trade issues on Tuesday overturned a decision by then-President Donald Trump to allow a reimposition of tariffs on some imported solar panels.
The decision by Judge Gary Katzmann of the U.S. Court of International Trade is a defeat for some domestic manufacturers.
It came one year after he ruled that Trump's October 2020 proclamation to revoke a tariff exemption for double-sided, or bifacial, solar panels had not violated an earlier court order.
Trump's proclamation was a "clear misconstruction" of a law that permits measures to liberalize rather than restrict trade, and "constituted an action outside the President's delegated authority," Katzmann wrote on Tuesday.
Shares of First Solar Inc, a large U.S. solar panel manufacturer, fell after the decision and were down 7.1% in late afternoon trading.
The Biden administration had defended Trump, saying he acted lawfully to close a "loophole" that he believed was undermining tariff protections against an "explosive" increase in imports.
The U.S. Department of Justice did not immediately respond to a request for comment.
Bifacial technology is a small but growing part of the solar panel market, costing more but capable of producing greater power than traditional panels.
Trump had said extending the exemption would likely reduce the effectiveness of tariffs meant to help shield the domestic solar industry against growing imports.
But a trade group, the Solar Energy Industries Association, contended that higher tariffs could wipe out a few billion dollars of domestic investment a year.
The group and some solar farms sued last December over the proclamation, saying Trump acted without going through required procedures.
Abigail Ross Hopper, the group's president, in a statement called Trump's proclamation "an unlawful attempt to harshen" tariffs and Katzmann's findings "clearly the right conclusion."
The United States in 2018 imposed four years of duties on solar panel imports, starting at 30% and declining to 15% in the final year. Trump's proclamation boosted the latter rate to 18%.
The case is Solar Energy Industries Association et al v U.S. et al, U.S. Court of International Trade, No. 20-03941.
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