New Antidumping and Countervailing Duty Investigations May Impact Imported Lithium-Ion Batteries

The American Active Anode Material Producers (AAAMP), an ad hoc trade association of domestic manufacturers, filed petitions on Dec. 18, 2024, with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) seeking antidumping (AD) and countervailing duties (CVD) on imports of active anode material from China.

Under U.S. law, domestic industries can request AD investigations to determine whether imported products are being sold in the U.S. at less than fair value, known as "dumping." They can also seek CVD investigations to examine whether foreign producers are receiving unfair subsidies from their governments. Duties may be imposed if the DOC finds evidence of dumping or subsidization and the ITC determines these imports cause material injury to the U.S. industry.

In these investigations, the DOC assesses whether dumping or subsidization is occurring and calculates the margins or subsidy amounts, while the ITC evaluates whether the domestic industry is materially injured or threatened with injury by these imports. If both agencies make affirmative preliminary determinations, U.S. importers must post cash deposits for AD and/or CVD duties, starting from the date of the DOC's preliminary determinations. These rates may be adjusted in the final determinations based on further participation by foreign producers and governments. 

Scope of the Investigation

This investigation pertains to active anode material. The physical characteristics of the covered product, which define the scope, are as follows:

Active anode material, whether synthetic, natural, or a blend of synthetic or natural; with or without coating; regardless of whether in powder, dry, liquid or any other form. Subject merchandise typically has a maximum size of 80 microns. Subject merchandise has an energy density of 330 milliamp hours per gram or greater and a degree of graphitization of 80 percent or greater. Subject merchandise can be referred to as "active anode material."

In addition, subject merchandise is covered regardless of:

• whether it is mixed with silicon-based active materials, e.g., silicon-oxide (SiOx), silicon-carbon (Sic) or silicon, or additives such as carbon black or carbon nanotubes
• the combination of compounds that create the graphite material; the graphite contained in the subject merchandise has a minimum purity content of 90 percent carbon
• whether it is imported independently, as part of a compound, in a battery, as a component of an anode slurry or in a subassembly of a battery such as an electrode; only the anode-grade graphite material is covered when entered as part of a mixture with silicon-based active materials, as part of a compound, in a battery, as a component of an anode slurry or in a subassembly of a battery such as an electrode

Active anode material subject to the investigations may be classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 2504.10.5000, 3801.10.5000 or 3801.90.0000. The HTSUS subheadings are provided for convenience and customs purposes only. The written description of the scope of the investigations is dispositive.

Alleged Dumping/Subsidization Margins

The AAAMP alleges dumping margins from 828 percent and 921 percent.

Estimated Timeline of the Investigation

Provided below are our current estimates for the timeline of potential duties in the AD/CVD investigation proceedings.

If critical circumstances (meaning, in anticipation of the imposition of AD/CVD duties, an exporter floods the market with large quantities of a product under investigation prior to the DOC's preliminary determination in order to avoid paying duties later) are found, duties may be imposed retroactively on merchandise entered up to 90 days prior to the publication of the DOC's preliminary determination in the Federal Register. To impose critical circumstances, both the DOC and the ITC must have an affirmative finding.

Potential Impact

Generally, active anode material is the primary component for lithium-ion battery anodes, which enable the flow of electric charge. The material is therefore significant to the production of Battery Energy Storage Systems (BESS), electric vehicles, consumer electronics, medical equipment and other applications.

Notably, the current scope of the petitions covers active anode material imported in a battery. This means that if the U.S. Government imposes AD/CVD duties, only the active anode material in imported lithium-ion batteries from China (rather than the entire value of the batteries) will be subject to these duties.

For more information on what potential impacts petitions could have on a company's imports or for assistance participating in the investigations, please contact the authors or another member of Holland & Knight's International Trade Group.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.