New antidumping duty petition: lemon juice from Brazil and South Africa – consequences for industry and downstream consumers

On December 30, 2021, Ventura Coastal LLC filed a petition with the US Department of Commerce (DOC) and the US International Trade Commission (ITC) alleging that lemon juice from Brazil and South Africa is being sold in the US at less than fair value.

The petitioner seeks the imposition of antidumping (AD) duties on imports of lemon juice from Brazil and South Africa, alleging dumping margins of 555.22 percent for Brazil and 128.61 percent for South Africa.

Under US law, a domestic industry can petition the government to initiate an AD investigation to determine whether an imported product is being sold in the US at less than fair value (ie, dumped). AD duties may be imposed if the DOC determines that imported goods are being 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 product covered by the investigation is certain lemon juice for further manufacture, with or without addition of preservatives, sugar or other sweeteners, regardless of the grams per liter of citric acid (GPL) level of concentration, brix level, brix/acid ratio, pulp content, clarity, grade, horticulture method (eg, organic or not), processed form (eg, frozen or not-from-concentrate), FDA standard of identity (as defined under 19 C.F.R. § 146.114 et seq.), the size of the container in which it is packed or the method of packing.

Excluded from the scope are (1) lemon juice at any level of concentration packed in retail-sized containers, ready for sale to consumers, typically at a level of concentration of 48 GPL; and (2) beverage products, such as lemonade, that are typically composed of 20 percent lemon juice or less.

The scope also includes lemon juice that is blended with lemon juice from sources or countries not subject to the petition. Only the subject component of such blended merchandise is covered by the scope. Blended lemon juice is defined as two or more distinct lemon juice products with differing countries of origin mixed together to form a singular lemon juice product where the component parts are no longer individually distinguishable.

The merchandise subject to the investigation is currently classified in the Harmonized Tariff Schedule of the United States under subheadings 2009.31.4000, 2009.31.6020, 2009.31.6040, 2009.39.6020, and 2009.39.6040. 

The total value of imports of lemon juice from Brazil and South Africa was $20.6 million in 2020.

Foreign producers and US importers of lemon juice

The petition identifies four exporters and 16 US importers of lemon juice from Brazil and South Africa.  See the lists of exporters and US 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 lemon juice from Brazil and South Africa.

12/30/2021 – Petition filed

2/14/2022 – ITC preliminary injury determination

6/8/2022 – DOC preliminary AD determinations, if not postponed

7/28/2022 – DOC preliminary AD determinations, if fully postponed

12/19/2022 – DOC final AD determinations, if both preliminary and final determinations are fully postponed

1/31/2023 – ITC final injury determination, if DOC determinations are fully postponed

2/7/2023 – AD orders published

Consequences for exporters and US companies

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 may retroactively go into effect 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 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 – are encouraged to have a strategy for addressing AD investigations, including possible participation.

Under the statutory time schedule for AD investigations, the first decision (ie, 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 14, 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.