New antidumping and countervailing duty petition: barium chloride from India – consequences for industry and downstream consumers
On January 12, 2022, Chemical Products Corporation filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that barium chloride from India is being sold in the US at less than fair value. The petition also alleges that the government of India is providing unfair subsidies to its producers and exporters of barium chloride to the US.
Barium chloride in powdered form is used primarily as an ingredient in molten baths used to harden small specialty steel parts such as tools and dies. Barium chloride in crystalline form is used primarily as an intermediate in the production of molecular catalyst sieves, which are used in oil refinery complexes to separate industrially useful paraxylene molecules from other mixed xylenes. Crystalline barium chloride is also used as a cleansing agent in certain chemical and water treatment processes, and as an ingredient in the production of certain chemicals, pigments, paper coatings, and inks.
The petitioner seeks the imposition of antidumping (AD) duties on imports of barium chloride from India, alleging a dumping margin of 235.88 percent. The petitioner also seeks the imposition of countervailing (CVD) duties on imports of barium chloride from India, alleging an unspecified total level of subsidies of at least 1 percent.
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). A domestic industry may also seek a CVD investigation into alleged subsidization of foreign producers or exporters by a foreign government. AD/CVD duties may be imposed if the DOC determines that imported goods are dumped and/or unfairly subsidized 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 covered by the petition is barium chloride, a chemical compound having the formulas BaC12 or BaC12-2H20.
Barium chloride is currently classified in the Harmonized Tariff Schedule of the United States under subheading 2827.39.45.00.
The total value of imports of barium chloride from India was $1.5 million in 2020.
Foreign producers and US importers of barium chloride
The petition identifies 14 exporters and 5 US importers of barium chloride from India. See the lists of exporters and US importers from the petition.
Estimated schedule of investigations
AD and CVD proceedings are conducted pursuant to a strict statutory time schedule. Below is an estimated schedule for the AD and CVD investigations on barium chloride from India.
1/12/2022 – Petition filed
2/28/2022 – ITC preliminary injury determination
4/7/2022 – DOC preliminary CVD determinations, if not postponed
6/13/2022 – DOC preliminary CVD determinations, if fully postponed
6/21/2022 – DOC preliminary AD determinations, if not postponed
8/10/2022 – DOC preliminary AD determinations, if fully postponed
12/30/2022 – DOC final AD and CVD determinations, if both preliminary and final determinations are fully postponed
2/13/2023 – ITC final injury determination, if DOC determinations are fully postponed
2/20/2023 – AD and CVD orders published
Consequences for exporters and US companies
US AD and CVD 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 and/or CVD 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 may retroactively go into effect 90 days prior to the date of publication. The AD and CVD duties will remain in effect if the DOC and ITC make affirmative final determinations.
The DOC calculates specific AD and CVD margins for certain individual foreign producers and exporters selected for examination. Such rates are often much lower than those alleged in the petition. However, foreign producers and exporters that do not participate in the investigations may be subject to substantially higher rates. Duties imposed at these higher rates may force exporters to stop shipping to the US and importers to cease importation of subject merchandise. Thus, interested parties – including US and foreign producers, exporters, importers, and downstream US purchasers of the subject merchandise – should have a strategy for addressing AD and CVD investigations, including possible participation.
Under the statutory time schedule for AD and CVD investigations, the first decision (the preliminary ITC determination of 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 February 28, 2022. 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 as well as to prepare and implement a pertinent strategy.
To learn more, please contact any of the authors.