On January 1, 2020, in 13 China Predictions for 2020, we predicted that “countervailing duty and anti-dumping cases against PRC industry sectors will continue to increase in both the US and the EU. Higher and higher duties against Chinese industry are being ordered. On January 11 we wrote about newly filed AD/ CVD Petitions on Wood Mouldings and Millwork Products from China, and on January 17, we wrote about newly filed AD/CVD Petitions on Vertical Shaft Engines from China. And today we write about a January 23 antidumping petition filed against difluoromethane (“R-32”) from China. In other words, we have been seeing a petition a week in 2020, which is both unprecedented and not surprising.

I’ve said it before and I’ll say it again: the more antidumping and countervailing duty cases filed, the more work and the more revenue for my firm’s international trade lawyers. But, that still does not convince me that it makes sense for US foreign policy with China to be so much based on these sorts of cases.

On January 23, 2020, Arkema Inc. filed an antidumping (AD) petition against U.S. imports of difluoromethane (“R-32”) from China.  This gas is largely used as a chemical input to produce hydrofluorocarbon (HFC) refrigerants.  Blends containing R-32 are more environmentally friendly than other HFC blends.

This new petition is an example of the ripple effects caused by AD duties.  The U.S. imposed AD duties on HFC blends from China in June 2015.  That AD order on HFC blends, however, specifically excluded individual components such as R-32.  Instead of shipping HFC blends to the United States (because they were now subject to high AD duties), the Chinese started shipping the input component R-32 (not subject to any AD duties) to companies who produced HFC blends in the United States.  In other words, the Chinese import competition moved upstream to the R-32 input level.

Arekema, the sole U.S. producer of R-32, also produced HFC blends.  However, Arkema could not compete with other U.S. producers of HFC blends who could still import cheaper Chinese R-32 which allowed them to price their HFC blends lower than Arkema.

Though Arkema did benefit from the higher prices for HFC blends after the AD duties were imposed, as the sole U.S. producer of R-32, Arkema still faced tougher competition and price pressure from other US producers of HFC blends who could take advantage of the surge of increased R-32 imports from China.  AD protection provided at one level (HFC blends) has pushed import competition to another (upstream) level, and has triggered a sequel trade battle in the refrigerant industry.


The petition proposes the scope of the merchandise to be covered by this AD investigation as difluoromethane (“R-32”), or its chemical equivalent, regardless of form, type or purity level.  See the proposed scope definition for a complete description of the physical characteristics of the covered merchandise, and the HTS numbers that may be used to import the subject merchandise.

Alleged AD Margins

Petitioner calculated estimated dumping margins of up to 87.98% for China.

Named Exporters/ Producers

Petitioner included a list of companies it believes are the foreign producers and exporters of the subject merchandise.

Named U.S. Importers

Petitioner also included a list of companies it believes are the U.S. importers of the subject merchandise.

Estimated Schedule of Investigations

January 23, 2020 – Petitions filed

February 12, 2020 – DOC initiates investigation

February 13, 2020 – ITC Staff Conference

March 8, 2020 – ITC preliminary determination

August 20, 2020 – DOC AD preliminary determination (assuming extended deadline) (7/1/20 – unextended)

January 2, 2021 – DOC final determination (extended)

February 16, 2021 – ITC final determination (extended)

February 23, 2021 – DOC AD orders issued (extended)

To recap, under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”).  For AD duties to be imposed, the U.S. government must determine not only that dumping, but also that the subject imports are causing “material injury” or “threat of material injury” to the domestic industry.