On February 14, 2024, US melamine producer Cornerstone filed antidumping (AD) and countervailing duty (CVD) petitions against melamine imports from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago claimed to be (a) dumped – i.e., sold into the United States at less than fair/normal value prices, and (b) government subsidized. AD case is against all these countries. CVD is just against Germany, India, Qatar, and Trinidad and Tobago. For AD, normal value is the home market or third-country price, or actual cost, plus a reasonable profit of the foreign producer/exporter.

The petition alleges dumping margins of:

• Japan: 103.66-123.81%
• Germany: 5.47-139.66%
• India: 378.01-619.24% 
• Netherlands: 33.4-75.18% 
• Qatar: 191.63-622.05%
• Trinidad and Tobago: 230.30-457.76%

Remedial AD import duties are requested for those amounts. No specific claimed subsidy margins.

Offsetting US AD/CVD import duties are imposed if (a) the US Department of Commerce (DOC) finds dumping or subsidies based on responses to DOC questionnaires (and verification audit thereof) by the accused foreign exporters/producers, and (b) the US International Trade Commission (ITC) finds that there is material injury (or threat thereof) because of the dumped or subsidized imports to a U.S. industry.

See the below Addendum for a detailed scope of the product covered by the petitions.

The estimated most immediate upcoming deadlines in this investigation are in the ITC preliminary injury investigation:

• February 20, 2024: ITC questionnaires issued
• February 28, 2024: questionnaire responses due (short extension possible) 
• March 6, 2024: ITC preliminary staff conference (witness testimony)
• March 11, 2024: written comments to ITC
• March 30, 2024:ITC preliminary injury decision

See Import Injury Investigations | United States International Trade Commission (usitc.gov) for ITC questionnaires and the petition.

Generally, the ITC finds sufficient indicia of injury to a US industry from the accused imports at this preliminary stage to continue the AD/CVD investigation (i.e., not end it). If so, then the investigation moves to DOC. 

The ITC threshold to find injury at this preliminary stage is low. Still, participation in ITC preliminary injury investigation can lay the factual foundation for a later final negative ITC injury decision, ending the case, which happens around 30%-50% of the time (varies over time). It is critical not to make statements in the rushed ITC preliminary injury stage that have the potential to negatively impact the final stage. 

Some AD/CVD petitions on their face indicate ITC injury issues, giving hope for a negative ITC injury decision. This petition does indicate that there might be a possibility that Japan might be excluded from the case as a negligible U.S. supplier. Otherwise, the petition appears to give the standard case to find injury.

The DOC preliminary CVD subsidy decision is May 8, 2024. But this date is generally extended about 65 days (to about July 13, 2024) if an investigated foreign producer/exporter satisfactorily and fully participates at DOC by accurately answering DOC questionnaires as to the extent (if any) of subsidies and later survives a rigorous DOC verification audit thereof. Then, the exporter can get a subsidy CVD import duty margin based on the actual extent of received subsidies (if any). In contrast, failure to so participate results in a prohibitively high, adverse DOC CVD import duty.

The DOC preliminary AD decision is on or around July 23, 2024. But this date, too, is generally extended about 50 days (on or around September 11, 2024) if an investigated foreign producer/exporter satisfactorily participates at DOC, fully and accurately answers DOC questionnaires as to the extent (if any) of dumping and later survives a rigorous DOC verification audit thereof. If so, the exporter gets a dumping margin based on its actual extent of dumping (if any), and not the petitioner-claimed dumping margins. In contrast, failure to so participate generally results in the highest petitioner-alleged dumping margin as the dumping import duty.

AD and CVD import duty liability generally begins as to imports at the time of the DOC preliminary AD or CVD decision. But it can be retroactive 90 days before then. The earliest theoretical date for retroactive AD duties is April 23, 2024; and for CVD is March 5, 2024. Retroactivity cannot be earlier than 20 days after petition filing. Retroactivity is to address certain 15% or more import surges following the filing of a petition that seek to avoid AD/CVD. But all the conditions to so find are generally, but not always, not found – e.g., (a) the ITC must find that retroactivity is necessary to avoid the AD/CVD remedy being undermined, which generally (but not always) the ITC does not find, and (b) AD margins must be found above 15% (if US importer affiliated to exporter) or 25% (if US importer non-affiliated to exporter) or an export subsidy found for CVD.

To determine their AD/CVD margin, DOC generally issues dumping and subsidy questionnaires to the two largest exporters to the United States from each accused country. All other exporters from a particular country usually get an AD/CVD margin based on the DOC findings as to the two largest exporters from that country.

The date of the DOC final CVD and AD decisions is on or around January 24, 2025, if all deadlines are fully extended (which is common). All events at DOC will appear at https://access.trade.gov/login.aspx.

The date of the ITC final injury decision is on or around March 10, 2025, if all deadlines are fully extended (which, again, is common).

Squire Patton Boggs members have successfully argued hundreds of AD/CVD cases throughout the world over four-plus decades, and served in key positions at DOC and ITC, as well as key Congressional and US Administration positions. SPB has a premier Government lobbying practice. SPD has in-house PhD Economists to assist. SPB is a global, full-service, law firm with 42 offices worldwide, plus local counsel, in all accused countries here.

ADDENDUM: SCOPE OF THE INVESTIGATION

Per the petition, melamine is “a fine, white crystalline powder that is used primarily to manufacture amino resins, the major end uses of which include surface coatings, laminates, molding compounds, paper treatment, adhesives, and textile-treatment applications in the automotive, appliance, dinnerware, furniture, fabric, and wood paneling industries.” Melamine (C3H6N6, and also known as 2,4,6-triamino-s-triazine) typically contains by weight a minimum of 99.8% melamine and has a molecular weight of 126.13, a specific density of 1.573 g/cc (depending on particle size), and a melting point of approximately 354ºC, with sublimation.

Most melamine consumed in the United States is used to make melamine resins, predominantly melamine-formaldehyde (MF) resins. Melamine resins are typically used in laminates, surface coatings, adhesives, molding compounds, paper treatment, and other applications. MF resins therefore “are further treated with additional chemicals, with the resultant product rendered insoluble in organic solvents.” This makes MF resins particularly suitable for use as coatings in appliance finishes, automotive topcoats, metal furniture finishes, and coil coatings.

All melamine production is based on “thermal decomposition of urea. Melamine can be produced using a low‐pressure catalytic process or a high-pressure non‐catalytic process.” The heat and pressure cause a reaction in the urea and ammonia (carrier gas), which yields melamine (which is further purified) and ammonia and carbon dioxide by-products. The pure melamine that results from this process contains a large particle size distribution and may be ground to a product with smaller particle size distribution. This product may be further ground and sieved to produce an even finer iteration of melamine.

The merchandise subject to these investigations is melamine (Chemical Abstracts Service (CAS) registry number 108–78–01, molecular formula C3 H6 N6). Melamine is a crystalline powder or granule typically, but not exclusively, used to manufacture melamine formaldehyde resins. All melamine is covered by the scope of these orders irrespective of purity, particle size, or physical form. Melamine that has been blended with other products is included within this scope when such blends include constituent parts that have been intermingled, but that have not been chemically reacted with each other to produce a different product. For such blends, only the melamine component of the mixture is covered by the scope of these orders. Melamine that is otherwise subject to these orders is not excluded when commingled with melamine from sources not subject to this investigation. Only the subject component of such commingled products is covered by the scope of these orders.

Imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago may be classified under subheading 2933.61.0000 of the Harmonized Tariff Schedule of the US (HTSUS).

Per the petition, melamine is “a fine, white crystalline powder that is used primarily to manufacture amino resins, the major end uses of which include surface coatings, laminates, molding compounds, paper treatment, adhesives, and textile-treatment applications in the automotive, appliance, dinnerware, furniture, fabric, and wood paneling industries.” Melamine (C3H6N6, and also known as 2,4,6-triamino-s-triazine) typically contains by weight a minimum of 99.8% melamine and has a molecular weight of 126.13, a specific density of 1.573 g/cc (depending on particle size), and a melting point of approximately 354ºC, with sublimation.

Most melamine consumed in the United States is used to make melamine resins, predominantly melamine-formaldehyde (MF) resins. Melamine resins are typically used in laminates, surface coatings, adhesives, molding compounds, paper treatment, and other applications. MF resins therefore “are further treated with additional chemicals, with the resultant product rendered insoluble in organic solvents.” This makes MF resins particularly suitable for use as coatings in appliance finishes, automotive topcoats, metal furniture finishes, and coil coatings.

All melamine production is based on “thermal decomposition of urea. Melamine can be produced using a low‐pressure catalytic process or a high-pressure non‐catalytic process.” The heat and pressure cause a reaction in the urea and ammonia (carrier gas), which yields melamine (which is further purified) and ammonia and carbon dioxide by-products. The pure melamine that results from this process contains a large particle size distribution and may be ground to a product with smaller particle size distribution. This product may be further ground and sieved to produce an even finer iteration of melamine.

The merchandise subject to these investigations is melamine (Chemical Abstracts Service (CAS) registry number 108–78–01, molecular formula C3 H6 N6). Melamine is a crystalline powder or granule typically, but not exclusively, used to manufacture melamine formaldehyde resins. All melamine is covered by the scope of these orders irrespective of purity, particle size, or physical form. Melamine that has been blended with other products is included within this scope when such blends include constituent parts that have been intermingled, but that have not been chemically reacted with each other to produce a different product. For such blends, only the melamine component of the mixture is covered by the scope of these orders. Melamine that is otherwise subject to these orders is not excluded when commingled with melamine from sources not subject to this investigation. Only the subject component of such commingled products is covered by the scope of these orders.

Imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago may be classified under subheading 2933.61.0000 of the Harmonized Tariff Schedule of the US (HTSUS).