American Citric Acid Industry Challenges Imports Circumventing U.S. Trade Remedies

The request to investigate possible circumvention by Chinese citric acid products through Thailand is only the first of several possible anti-circumvention actions to be filed by the American citric acid industry.

Oct 26 2010 --- On October 22, 2010, the American citric acid industry asked that the U.S. Department of Commerce (Commerce) investigate possible “circumvention” of antidumping (AD) and countervailing duty (CVD) orders on citric acid and certain citrate salts (citric acid products) from China. The target of this initial request is the transshipment of Chinese citric acid products through Thailand.

In May 2009, AD and CVD orders were imposed on imports of citric acid products from China. These orders require importers of Chinese citric acid products to post CVD duties of between 3.60 and 118.95 percent, and AD duties of between 94.61 and 156.87 percent. By transshipping the citric acid products and declaring the intermediate country as the country of origin, Chinese producers and exporters avoid payments of these duties. These actions not only rob the U.S. Treasury of significant revenues, but they also threaten the health of American citizens by rendering the source of an important food, beverage, and pharmaceutical ingredient untraceable, according to the US citric acid industry.

At least one official of a major Chinese citric acid producer has made public statements confirming this practice. The July 2010 edition of Corn Products China News contains the following remarkable disclosure:

In order to avoid anti-dumping duty and CVD in the US, Chinese citric acid producers usually make use of overseas traders with no anti-dumping or CVD cases in the US to export citric acid to the US, disclosed by Mr. Yuan, Securities Consultant from Anhui BBCA Biochemical Co., Ltd. (Anhui BBCA), one of the leading citric acid producers in China.

The request to investigate possible circumvention by Chinese citric acid products through Thailand is only the first of several possible anti-circumvention actions to be filed by the American citric acid industry. The U.S. producers continue actively to monitor and collect information on global Chinese shipments and are gathering evidence regarding possible transshipment of Chinese citric acid products through a number of other countries, including Israel, Indonesia, India, the Dominican Republic, Japan, Korea, and Taiwan. In addition, the U.S. citric acid industry is monitoring imports for possible product mislabeling, including the practice of blending Chinese citric acid products with other ingredients in order to avoid duty payments. The industry is working closely with Commerce and U.S. Customs and Border Protection to ensure that duties owed are collected on imports, that any potentially illegal activities are investigated, and that the integrity of the supply chain for this important food product is not compromised.

The U.S. citric acid industry consists of Archer Daniels Midland Company; Cargill, Incorporated; and Tate & Lyle Americas LLC. Collectively, these companies employ hundreds of highly skilled workers in the states of Illinois, Iowa, Minnesota, North Carolina, and Ohio to produce and sell citric acid and citrate salts. Citric acid is a product made from crops and is used in many popular food products such as soft drinks, cheese, and baked goods. It is also an environmentally safe cleaning agent, and is used in many household cleaning products, such as liquid laundry detergents.