US federal agency green-lights shrimp antidumping, countervailing duties
The duties were first announced in October.
The United States International Trade Commission (USITC) on Tuesday affirmed findings by the US Department of Commerce (DOC) that exporters in several countries sold frozen warmwater shrimp below cost, or benefitted from subsidies.
The USITC wrote in its determination that the US industry was "materially injured" by imports of frozen warmwater shrimp from Indonesia that was sold at less than fair value. The commission also affirmed DOC findings that frozen warmwater shrimp from Ecuador, India and Vietnam were subsidized by their governments.
An overview of unfair US trade practices
What is Dumping?
Dumping occurs when a foreign producer sells a product in the United States at a price that is below that producer’s sales price in the country of origin (“home market”), or at a price that is lower than the cost of production. The difference between the price (or cost) in the foreign market and the price in the U.S. market is called the dumping margin. Unless the conduct falls within the legal definition of dumping as specified in U.S. law, a foreign producer selling imports at prices below those of American products is not necessarily dumping.
What is a Countervailable Subsidy?
Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture, or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market conditions. The statute and regulations establish standards for determining when an unfair subsidy has been conferred. The amount of the subsidies that the foreign producer receives from its government is the basis for the rate by which the subsidy is offset, or “countervailed,” through higher import duties.
The investigations were the result of petitions filed by the American Shrimp Processors Association (ASPA), a trade group representing the US wild shrimp sector.
“The Southern Shrimp Alliance welcomes the US International Trade Commission’s acknowledgement of the pain that our industry has experienced over the last couple of years due to a flood of unfairly-traded shrimp imports,” said John Williams, executive director of the US trade group Southern Shrimp Alliance.
The federal agency based its determination on evidence provided by 20 US processors of shrimp and 388 shrimp harvesters.
What initiates an antidumping or countervailing duty investigation?
Under US law, a domestic industry may petition the government to initiate an AD investigation into the pricing of an imported product to determine whether it is sold in the U.S. at less than fair value (i.e., “dumped”).
A domestic industry may also petition for the initiation of a CVD investigation, which examines alleged subsidization of foreign producers by a foreign government.
The DOC will impose AD and/or CVD duties if
(1) it determines that imported goods are dumped and/or subsidized, and
(2) the ITC also determines that the domestic industry is materially injured or threatened with such injury by reason of subject imports.
If both Commerce and the International Trade Commission make affirmative final findings of dumping and injury, Commerce instructs U.S. Customs and Border Protection to assess duties against imports of that product into the United States. The duties are assessed as a percentage of the value of the imports and are equivalent to the dumping and subsidy margins, described above. For example, if Commerce finds a dumping margin of 35%, U.S. Customs and Border Protection will collect a 35% duty on the entered value of the product at the time of importation into the United States to offset the amount of dumping.
Good and bad news for shrimp exporters
Both companies will, however, make countervailing duty deposits – 3.57 percent for Santa Priscila and 4.41 percent for SONGA, consistent with the DOC's final determination from October.
The trade remedy will require importers of shrimp from Ecuador to continue to make cash deposits of roughly 3.8 percent on import entries.
While Indonesia will avoid paying countervailing duties on its imports in the DOC investigation, importers from Ecuador, India and Vietnam were determined to have benefitted from subsidies.
In addition to the antidumping duties already imposed on shrimp imports from India and Vietnam, importers of Indian shrimp will be required to make additional countervailing duty deposits of roughly 5.8 percent, while importers of Vietnamese shrimp will pay an additional 2.8 percent.
These cash deposit requirements will remain in place until US importers have the opportunity to request refunds, likely meaning that they will not be revised until 2027, according to the Southern Shrimp Alliance.
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