Alfredo Carrillo Obregon and Clark Packard
When the Trump administration announced broad, high tariffs in early 2025, importers rushed to bring goods into the United States before the duties took effect. The impact of this import “rush” went beyond causing a brief spike in monthly US imports; firms’ stockpiling of imports helped mitigate cost increases for importers and delay price increases for final consumers. In other words, in the absence of stockpiling, the administration’s import taxes would have proven even more costly for Americans, and consumers would have likely shouldered a higher share of those costs.
The administration is cracking down on importers stockpiling imports of polysilicon and polysilicon derivatives (most notably solar cells and modules) that will be subject to new tariffs and price floors beginning on December 4. Though narrow in scope, this measure—published in the Federal Register two days after its effective date (September 22)—may pave the way for more expansive restrictions in the future, given the legal basis the administration is relying on to pursue it.
To recap, President Trump imposed polysilicon tariffs and a “minimum import price” (MIP) on August 6, using his authority under Section 232 of the Trade Expansion Act of 1962. Our Cato colleagues Scott Lincicome, Chad Smitson, and Eli DeLuca previously summarized and evaluated the potential impact of these measures, which will likely add another chapter to the long-running saga of failed US solar protectionism. Buried in the proclamation, as flagged by the American Action Forum’s Jacob Jensen, is a provision not found in any of the president’s previous tariff proclamations directing the Secretary of Commerce and US Customs and Border Protection (CBP) to restrict the importation of polysilicon and its derivatives by a company that the Secretary has previously determined is stockpiling said products ahead of the date the tariffs and MIP enter into force. The TFR published by Commerce operationalizes this unprecedented provision.
Specifically, the TFR outlines multiple criteria and processes that Commerce will use to monitor companies importing polysilicon and its derivatives covered by the Section 232 tariff action, enforce prohibitions on the importation of these products, and provide companies with the opportunity to request that Commerce waive such prohibitions. These include:
For “existing” importers (i.e., registered with CBP before August 6): Commerce will assess whether such importers are importing polysilicon and the covered derivatives in volumes “substantially greater than their historic averages,” based on a) the total and weekly average volume of such imports since August 6; b) the weekly average volume of such imports throughout 2025 and from January 1 to August 6, 2026; and c) these importers’ use of existing or new affiliates that do not have a history of importing polysilicon products to do so. If Commerce determines that a firm is importing polysilicon products in “substantially greater” volumes than its historic averages, such an importer will be barred from bringing in more of those products until December 4, unless it secures a waiver.
For “new” importers (i.e., registered with CBP after August 6): Unless the importer secures a waiver from Commerce, it is prohibited from importing polysilicon or the covered derivatives beyond a maximum, product-specific weekly volume specified in the TFR, which Commerce may adjust in the future if “necessary to address stockpiling.” A new importer whose weekly import volumes exceed these thresholds will be barred from importing additional polysilicon products until December 4, unless it secures a waiver.
Enforcement: In addition to prohibiting additional importations of polysilicon and the listed derivatives, the TFR notes that Commerce and CBP will “take action against importers and customs brokers that establish, use, or facilitate multiple [importers of record] or other arrangements” to circumvent the restrictions outlined for new importers. What such “action” means in the context of importers (i.e., firms) is unclear; customs brokers, on the other hand, may have their licenses revoked or suspended or be hit with monetary sanctions.
Waivers: Both existing and new importers may request that Commerce waive import prohibitions to which they become subject. Importers applying for a waiver must submit information on their companies’ ownership structure, beneficial ownership, and manufacturing operations; the type, volume, and use of polysilicon imports for manufacturing or for transferring to third parties; and the commercial reasons for their importation of polysilicon and its derivatives. A senior officer of the applying importer must also certify the accuracy of the information submitted under penalty of perjury.
These provisions raise multiple concerns. First, Commerce retains significant discretion in determining whether a company is stockpiling imports of polysilicon products. This is particularly true in the case of “existing” importers, where Commerce’s assessment is based on “historic averages” and done on a case-by-case basis. Moreover, the waiver process appears to involve an intrusive application and does not inspire much confidence in predictability and transparency, as the TFR does not specify which criteria Commerce will base its decision on or whether Commerce will explain the reasons for approving/denying applications or publicly disclose such approvals or denials. Finally, the TFR suggests an intensive approach to monitoring and enforcing this stockpiling prohibition, which raises additional questions about the bureaucratic complexity (and costs) of this operation—particularly at a time when Commerce and CBP are tasked with monitoring compliance with multiple executive tariff actions.
These are short-term considerations. More concerning is the prospect that similar import-stockpiling prohibitions become the norm in future tariff actions. The laws that the Trump administration has used to impose tariffs certainly do not clearly prohibit such an approach: Section 232, on which the polysilicon restriction relies, simply gives the president the authority to “adjust imports” and only requires a 15-day buffer period before such an adjustment takes effect. (The statute has previously been used to block the importation of specific goods altogether.) Section 301 of the Trade Act of 1974—the statute used by President Trump to impose tariffs on 60 countries for their alleged importation of goods made with forced labor—similarly authorizes the US Trade Representative (USTR), at the direction of the president, to “impose duties or other import restrictions,” the latter of which includes non-tariff “limitations” and “prohibitions,” without being subject to a buffer period. Section 122 of the same act, which President Trump used in the wake of the Supreme Court’s decision invalidating his “emergency” tariffs to impose temporary “balance-of-payments” tariffs, expressly allows the president to impose both duties and quantitative restrictions (i.e., quotas) for a 150-day period. Section 338 of the Tariff Act of 1930, the statute fueling the recent trade war with Canada, allows the president to impose duties and ban imports, with only the former subject to a 30-day buffer period.[1] In sum, none of the tariff authorities at the executive branch’s disposal expressly bar it from restricting the volume of foreign goods that importers can bring in before tariffs on those products take effect.
As noted at the outset, prohibiting import stockpiling could have significant implications: Importers that cannot build inventories ahead of discretionary and unpredictable tariff actions by the executive branch will have to pass costs on to consumers of these products more quickly. This outcome would be exacerbated when importers cannot find alternate sources for tariffed products or when alternatives are significantly more expensive. There might be particular situations—such as those involving legitimate threats to the integrity and defense of the United States—where expediently restricting the importation of certain goods may be a reasonable policy. Forcing American companies and consumers to endure more of the burden of costly, shortsighted, and unpopular protectionism is not one of those.
[1] Under Section 338, the president may only restrict the importation of goods from a foreign country if he/she determines that, following an initial tariff action under this statute, the country has “maintained or increased” its discrimination against US commerce.
