US Sets Preliminary Penalties on Chinese Potassium Phosphate Salts

The U.S. Commerce Department said on March 11 that it has set preliminary antidumping duties (AD) on imports of certain potassium phosphate salts from China, a move that might escalate trade disputes between the two countries.

The department said it "preliminarily determined that Chinese producers/exporters have sold potassium phosphate salts in the United States at 69.58 to 95.40 percent less than fair value."

As a result of this preliminary determination, Commerce will instruct U.S. Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates.

The products covered by this investigation are used in industrial and institutional cleaning products, fertilizers, and food additives.

From 2006 to 2008, imports of certain potassium phosphate salts from China increased 228 percent by volume and were valued at an estimated 16.4 million dollars in 2008, according to the U.S. Commerce Department.

Commerce said that it is currently scheduled to make its final determination in May 2010.

If Commerce makes an affirmative final determination, and the U. S. International Trade Commission makes an affirmative final determination that imports of certain potassium phosphate salts from China materially injures, or threaten material injury to, the domestic industry, Commerce will issue an antidumping duty order.

The new case followed the Commerce Department's preliminary antidumping duties on imported magnesia carbon brick from China on March 4. On March 2, Commerce also slapped preliminary sanctions on imported Chinese potassium phosphate salts and coated paper.

The protectionist moves by the Obama administration will ultimately hurt the U.S.-China trade relations, which are becoming more and more important due to the global financial crisis, economists warned.

The onset of the global recession appears to have set off an increase in trade disputes around the world.

Globally, new requests for protection from imports in the first half of 2009 are up 18.5 percent over the first half of 2008, according to the World Bank-sponsored Global Anti-dumping Database organized by Chad P. Bown, a Brandeis University economics professor.

That increase follows a 44 percent increase in new investigations in 2008. And China has become the main target of the rising protectionism.

China strongly opposed the U.S. decision, saying that it is a protectionist move.

"We hope the United States can get rid of the bias and admit China's market economy status soon to tackle the double standards thoroughly and give Chinese enterprises equal and fair treatment," China's Ministry of Commerce (MOC) spokesman Yao Jian said recently.

Chinese Commerce Minister Chen Deming last week repeated the stance that the nation does not seek to accumulate hefty trade surplus.

Although more than 70 percent of China's trade surplus came from United States, which was not what China desired, said Chen on the sidelines of the annual session of the China's National People's Congress (NPC).