New antidumping duty petition: Acrylonitrile-butadiene rubber from France, Mexico and the Republic of Korea – consequences for exporters and US importers

On June 30, 2021, chemical companies Zeon Chemicals L.P. and Zeon GP LLC filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that acrylonitrile-butadiene rubber (NBR) from France, Mexico and the Republic of Korea (Korea) is being sold in the US at less than fair value.

The petitioners seek the imposition of antidumping (AD) duties on imports of NBR from the three countries.  They allege dumping margins of 72.27 percent for France, 97.00 for Mexico and 110.31 percent for Korea.

Under US law, a domestic industry can petition the government to initiate an AD investigation to determine whether an imported product is sold in the US at less than fair value (ie, dumped).  AD duties may be imposed if the DOC determines that imported goods are dumped and if the ITC determines that the domestic industry is materially injured or threatened with such injury by reason of the subject imports.

Products covered by the petition

The merchandise subject to the petition is commonly referred to as acrylonitrile butadiene rubber or nitrile rubber (NBR).  NBR is a synthetic rubber produced by the emulsion polymerization of butadiene and acrylonitrile with or without the incorporation of a third component selected from methacrylic acid or isoprene.  NBR is sold in bale, slab, crumb, powder pellet, particulate and liquid form. 

The products covered by the petition are currently classified under subheading 4002.59.00 of the Harmonized Tariff Schedule of the United States (HTSUS).

NBR in the latex form (HTSUS subheading 4002.51.00) is excluded from the scope of this investigation. Also excluded are a) NBR containing additives (eg, nitrile rubber further compounded with fillers, reinforcement agents or vulcanization agents, among others; for example, products classified under HTSUS subheading 4005); b) NBR containing rubber processing chemicals, NBR containing other materials used for further processing beyond the polymerization process; and (c) hydrogenated NBR (commonly referred to as HNBR) produced by subsequent dissolution and hydrogenation of NBR.

The total value of US imports of NBR subject to the petition from France, Mexico and Korea was $52.3 million in 2020.

Foreign producers and US importers of NBR

The petition identifies four exporters and ten US importers of NBR from France, Mexico and Korea.  See the lists of exporters and importers from the petition.

Estimated schedule of investigations

AD proceedings are conducted pursuant to a strict statutory time schedule. Below is an estimated schedule for the AD investigations on NBR from France, Mexico and Korea.

6/30/2021 – Petition filed

8/16/2021 – ITC preliminary injury determination

12/7/2021 – DOC preliminary AD determinations, if not postponed

1/26/2022 – DOC preliminary AD determinations, if fully postponed

6/17/2022 – DOC final AD determinations, if both preliminary and final determinations are fully postponed

8/1/2022 – ITC final injury determination, if DOC determinations are fully postponed

8/8/2022 – AD orders published

Consequences for exporters and US importers

US AD investigations can result in the imposition of substantial duties in addition to already-applicable duties and tariffs.  If the ITC and DOC make affirmative preliminary determinations, US importers will be required to post cash deposits corresponding to the ad valorem AD duty rates determined for the subject merchandise on or after the date on which the DOC’s preliminary determination is published in the Federal Register.  In certain circumstances, such duty deposit requirements can go into effect retroactively, 90 days prior to the date of publication.  The AD duties will remain in effect if the DOC and ITC make affirmative final determinations.

The DOC calculates specific AD margins for certain individual producers and exporters selected for examination.  Such rates are often much lower than those alleged in the petition.  However, producers and exporters that do not participate in the investigations may be subject to substantially higher margins.  Duties imposed at these higher margins may force exporters to stop shipping to the US and importers to cease importation of subject merchandise.  Thus, interested parties – including foreign producers, exporters and importers – may consider having strategy for addressing AD investigations, including possible participation.

Under the statutory time schedule for AD investigations, the first decision (the preliminary ITC determination whether there is a reasonable indication that the US industry is materially injured or threatened with material injury by reason of the subject imports) must be made within 45 days after the filing of the petition – in this case, by August 16, 2021.  An ITC hearing (ie, a public conference) is held around 21 to 23 days after the filing date.  As a result, agency staff work – including the issuance of questionnaires to interested parties – begins almost immediately.  Thus, quick action is encouraged to understand the specific implications of these developments and to prepare and implement a pertinent strategy.

To learn more, please contact any of the authors.