Section 201 Safeguards
Section 201 Safeguards Temporary trade restrictions (such as tariffs or quotas) that the U.S. can impose to protect domestic industries from a surge in imports that causes or threatens serious injury. Authorized under Section 201 of the Trade Act of 1974 and compliant with WTO safeguard provisions.
Latest Update (February 2025)
The ITC has initiated a midterm review of the safeguard measure on large residential washers, with potential adjustments to the tariff-rate quota levels expected.
Read USITC Press ReleaseWhat It Means
Section 201 safeguards are temporary "emergency brakes" on imports that the U.S. government can apply when a surge of foreign products seriously harms or threatens American industries. Unlike other trade remedies, safeguards don't require proving unfair trade practices—just that imports are causing serious damage to U.S. producers.
Key Features
Section 201 safeguards are different from other trade remedies because they focus on the impact of imports rather than unfair practices:
Temporary Protection
Usually imposed for up to 4 years, with a possible 4-year extension
Progressive Liberalization
Restrictions must gradually decrease during the protection period
Global Application
Applied to all imports of a specific product, regardless of country of origin
Investigation Process
Before safeguards can be implemented, the U.S. International Trade Commission (USITC) must:
- Determine that increased imports are a substantial cause of serious injury to domestic industry
- Recommend appropriate remedies to the President
- The President then decides whether to implement safeguards and in what form
Note: Unlike antidumping or countervailing duties, Section 201 cases don't require proof of unfair trade practices—only evidence of serious injury from increased imports.
Historical Timeline
Legal Foundation Established
The Trade Act of 1974 is signed into law, including Section 201 safeguard provisions
Criteria Strengthened
The Trade and Tariff Act of 1984 modifies Section 201 to make it more effective for domestic industries
WTO Agreement on Safeguards
International rules governing safeguard measures are formalized in the WTO Agreement on Safeguards
Steel Safeguards Imposed
President Bush imposes tariffs of up to 30% on various steel products for 3 years
Steel Safeguards Terminated
U.S. terminates steel safeguards early after adverse WTO ruling
Solar Panels & Washing Machines
President Trump imposes safeguard tariffs on solar cells and washing machines
Real-World Example
Case Study: Solar Cell Safeguards (2018-2022)
Background
In May 2017, Suniva, a bankrupt U.S. solar cell manufacturer, filed a Section 201 petition seeking relief from imported solar cells and modules. The company was later joined by SolarWorld Americas.
USITC Investigation
The USITC conducted an investigation and determined that increased imports were a substantial cause of serious injury to the domestic industry. It recommended a tariff-rate quota on solar cell imports and an increase in duties on modules.
Presidential Proclamation
In January 2018, President Trump issued a proclamation imposing:
- A 30% tariff on imported solar modules and cells (above a 2.5 gigawatt quota for cells), decreasing to 25% in year two, 20% in year three, and 15% in year four
- Exemptions for certain developing countries
Industry Impact
The safeguard measures had mixed results:
Cell/Module Manufacturers
Some new manufacturing facilities opened in the U.S., but many domestic producers still struggled.
Solar Installers
Initially faced higher costs, but many adapted by securing exclusions or absorbing the tariffs.
Extension and Modification
In 2022, the Biden administration extended the safeguard for four additional years but with modifications, including:
- Doubling the tariff-free quota for cells to 5 gigawatts
- Excluding bifacial solar panels (those that capture sunlight from both sides)
- Maintaining the 15% tariff rate for the extension period
Section 201 Eligibility Assessment
Answer a few questions to evaluate if your industry might qualify for Section 201 safeguard protection.
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