Commodity groups are warning the Commerce Department against placing tariffs on imports of herbicide active ingredient 2,4-D from China and India as result of an investigation into allegations that the imported product is being sold in the U.S. at “less than fair value.”
Leaders of six commodity groups wrote to Commerce Secretary Gina Raimondo on July 12 to caution that restricting imports of 2,4-D — an ingredient in herbicides that control broadleaf weeds — could lead to shortages at a time farmers feel financial pressure from rising input costs and low commodity prices.
They claimed Corteva Agriscience, the only U.S. manufacturer of the product and the original petitioner to Commerce and the U.S. International Trade Commission to place antidumping and countervailing duties on 2,4-D imports, does not have enough supply to meet demand.
“Corteva doesn’t make enough of this to meet the demand of farmers, so we have to use imports,” Nancy Martinez, director of public policy for trade at the National Corn Growers Association, told Agri-Pulse in an interview. “It’s not a choice we take lightly by any means, but we have to rely on those imports to service what we need on the ag side.”
The chemical has been commercially available since the 1940s, according to Environmental Protection Agency data. The National Pesticide Information Center lists it as being used on a number of crops including field corn, soybeans, spring wheat, hazelnuts, sugarcane and barley.
Corteva’s petition, submitted March 14, argued that China and India are subsidizing manufacturing of the product sold in the United States.
Corteva is struggling to compete with imports, Ricardo Garcia de Alba, then the company’s row crop herbicide and nitrogen management global portfolio leader, told a USITC hearing this spring.
Chinese suppliers are “gaining access to the inputs required in the 2,4-D manufacturing process at very low prices, and in some cases for free,” Garcia de Alba argued. By sourcing raw material at “sometimes-negative” costs, he said Chinese producers appeared to be pricing their materials below cost. India, he added, has also been scaling up its capacity to produce 2,4-D and is poised to increase exports to the U.S. market.
“We have witnessed an increase in imports coupled to a significant decrease in price of those same imports,” Garcia de Alba said. “At these pricing levels, we cannot participate in a reasonable manner against these imports. This situation negatively impacts our sales and causes our capacity to be underutilized.”
Meiogenix Inc., an ag biotech firm, named Garcia de Alba its CEO in June.
Nancy Martinez of NCGAThe alleged dumping margins for Chinese imports are 127.21%, while alleged dumping margins for Indian imports are 36.41%,according to the International Trade Administration.
Just over 9.1 million kilograms of 2,4-D worth $24.277 million was imported from China in 2021, before a surge in 2022 to 23.034 million kilograms worth $94.225 million. Imports from China in 2023 fell back to 9.3 million kilograms worth $22.917 million, according to U.S. Census Bureau data published by the ITA.
Imports from India, meanwhile, totaled 3.9 million kilograms representing $9.64 million in value in 2021, before jumping to 8.32 million kilograms. India exported 6.942 million kilograms of the chemical, worth $21.6 million, to the United States last year, according to the Census Bureau.
Commerce began antidumping duty and countervailing duty investigations April 23 and is set to come to preliminary antidumping duty determinations Sept. 10. It was scheduled to finish preliminary countervailing duty determinations by June 27, though it has since postponed that deadline to Sept. 3. Final antidumping and countervailing duty determinations are to be announced by Nov. 25 and Sept. 20, respectively.
The USITC is investigating whether the U.S. industry is injured. The commission voted May 17 to continue its examination after finding “a reasonable indication that a U.S. industry is materially injured by reason of imports of 2,4-dichlorophenoxyacetic acid from China and India that are allegedly sold in the United States at less than fair value and subsidized by the governments of China and India.”
A preliminary USITC report published in May found that “cumulated subject imports significantly undersold the domestic like product, gained market share at the expense of the domestic industry, and suppressed domestic prices to significant degree.”
While the USITC preliminary report points out that NCGA argued imports from China and India increased from 2021 to 2022 because “Corteva’s 2,4-D production was insufficient to supply increased demand for 2,4-D in the U.S. market,” it notes that Corteva did not report any supply constraints last year, but still saw its production fall, “indicating it had significant excess capacity that could have been used to supply additional volumes of 2,4-D to the U.S. market that year.”
“The record shows that subject imports significantly undersold and suppressed domestic prices during the [period of investigation], which cannot be explained by the COVID-19 pandemic or U.S. weather events, which increased demand for 2,4-D in the U.S. market from 2021 to 2022 and should have therefore enabled the domestic industry to increase its prices in line with its increased costs during the period,” the document states.
USITC is slated to issue final determinations in its antidumping investigation by next January.
The commodity group letter, meanwhile, warned that “affirmative findings in these investigations will cause farmers to be saddled with supply shortages and delays, significant financial strain, and lower yields.” Commerce should “appropriately consider these impacts when calculating preliminary duties and choose the lowest possible rate to minimize harm,” they wrote.
“The harm claimed by Corteva does not compare to the harm that America’s growers will incur should you apply high duties to these imports,” they added.
Signers of the letter were NCGA, American Soybean Association, National Association of Wheat Growers, National Barley Growers Association, U.S. Durum Growers Association and National Sorghum Producers Association.
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