Detail

United States of America

Biofuels

Biodiesel

01/08/2017

Trade

Import policy (countervailing duties)

Introduced preliminary countervailing duties on imports of biodiesel from Argentina and Indonesia, claiming that Argentina and Indonesia received subsidies of, respectively, 50–64 percent and 41–68 percent. Final duty determinations would be due on 7 November 2017.

The U.S. Department of Commerce (DOC) announced affirmative preliminary determinations in the countervailing duty investigations related to Indonesian and Argentine exports of biodiesel to the United States. DOC claimed that Argentine and Indonesian exporters received subsidies of, respectively, 50–64 percent and 41–68 percent. The department also determined that ‘critical circumstances’ exist in both cases, which allows for retroactive collection of duties (see also MPPU Aug.’17). Final duty determinations are due on 7 November 2017. While DOC finalizes its investigations, biodiesel importers will be required to pay cash deposits on purchases from Argentina and Indonesia based on the indicated subsidization rates, going back to May 2017. As to the companion anti-dumping investigations, preliminary determinations are expected in October 2017. DOC’s initial notice has led to temporary spikes in US and international soybean oil prices. Evidently, market participants are concerned that, in the United States, demand for domestically produced biodiesel – which is mainly produced from soybean oil – could increase once retaliatory import duties are imposed. Argentina would be particularly affected by the envisaged trade policy change: in 2016, U.S.-bound exports accounted for approximately 90 percent of Argentina’s overall biodiesel sales, with imports from Argentina representing two-thirds of the United States’ total biodiesel purchases. Reportedly, Argentina has offered to collaborate with the U.S. DOC during its final duty determination. The two parties may also consider the introduction of tariff rate quotas, according to press reports.