China’s Anti-Dumping Measures on Specialty Synthetic Rubber

Anti-dumping refers to the measures taken against the dumping of foreign goods in a country's domestic market. Typically, in addition to the regular import duties, an extra surcharge is imposed on dumped foreign goods, making it unprofitable for them to be sold at low prices. This additional tax is known as an "anti-dumping duty." Among China's major specialty synthetic rubbers, which have relatively high import dependency, anti-dumping policies are generally in place. However, the specific circumstances vary among different specialty rubbers, and the imposition of anti-dumping duties—and their duration—differ from one type to another. This article will focus on summarizing the anti-dumping policy situations for ethylene propylene diene monomer (EPDM) rubber, nitrile rubber, butyl rubber, and chloroprene rubber.

China’s anti-dumping policies on specialty synthetic rubber have been in place for a long time; some specific rubber grades have been subject to these policies for as many as 17 years. There are also rubber grades for which anti-dumping investigations were initiated in the early 21st century but ultimately came to nothing. As of 2021, China’s major specialty synthetic rubber grades were largely covered by anti-dumping policies.

1. The Anti-Dumping Process for Specialty Synthetic Rubber

1.1 Ethylene Propylene Diene Monomer Rubber

On June 19, 2019, the Ministry of Commerce decided to initiate an anti-dumping investigation into imported ethylene-propylene-diene monomer (EPDM) rubber originating from the United States, South Korea, and the European Union. Effective from the date of this announcement, the Ministry of Commerce will conduct an anti-dumping investigation into imported EPDM rubber originating from the United States, South Korea, and the European Union. The dumping investigation period identified in this investigation is from January 1, 2018, to December 31, 2018, while the industry injury investigation period spans from January 1, 2015, to December 31, 2018. The scope of the investigation covers imported EPDM rubber originating from the United States, South Korea, and the European Union.

The investigating authority has preliminarily determined that imported ethylene-propylene-diene monomer (EPDM) rubber originating from the United States, South Korea, and the European Union is being dumped, causing substantial injury to the domestic EPDM rubber industry, and that there is a causal link between the dumping and the substantial injury. In accordance with Articles 28 and 29 of the Anti-Dumping Regulations, the investigating authority has decided to impose provisional anti-dumping measures in the form of cash deposits. Starting from October 28, 2020, importers of the products under investigation shall provide the relevant cash deposits to the Customs of the People’s Republic of China based on the deposit rates for each company as determined in this preliminary ruling. The imported EPDM rubber involved includes supplies from the United States, South Korea, and the European Union. The specific deposit rates are as follows: Dow Chemical Company—222.0%; ExxonMobil Company—214.9%; Arlanxeo USA Inc.—219.8%; U.S. Lion Elastomers Inc.—219.8%; Other U.S. Companies—222.0%; Kukje POLYCHEM Co., Ltd.—12.5%; Lotte Wisa Lysil Elastomers Co., Ltd.—21.1%; Other Korean Companies—24.5%; Arlanxeo Netherlands B.V.—18.1%; ExxonMobil Chemical France S.A.—4.7%; Italian Wisa Lysil S.r.l.—16.5%; Other EU Companies—31.7%.

The investigating authority ultimately determined that imported ethylene propylene diene monomer (EPDM) rubber originating from the United States, South Korea, and the European Union was being dumped, causing substantial injury to China’s domestic EPDM rubber industry, and that there was a causal link between the dumping and the substantial injury. In accordance with Article 38 of the Anti-Dumping Regulations, the Ministry of Commerce submitted a proposal to the Tariff Commission of the State Council to impose anti-dumping duties. Based on the Ministry of Commerce’s proposal, the Tariff Commission of the State Council made a decision to impose anti-dumping duties on imported EPDM rubber originating from the United States, South Korea, and the European Union, effective December 20, 2020. The specific duty rates for each country remain as initially determined. The duration of the anti-dumping measures will be five years, starting from December 20, 2020.

1.2 Nitrile Rubber

On November 9, 2017, the Ministry of Commerce (hereinafter referred to as the investigating authority) issued Announcement No. 74 of 2017, deciding to initiate an anti-dumping investigation into imported nitrile rubber originating from South Korea and Japan (hereinafter referred to as the product under investigation).

After more than eight months of investigation, on July 16, 2018, the Ministry of Commerce issued a notice announcing its preliminary ruling on the anti-dumping investigation into imported nitrile rubber originating from South Korea and Japan. The ruling found that the investigating authority had preliminarily determined that imported nitrile rubber originating from South Korea and Japan was being dumped, that the domestic nitrile rubber industry had suffered material injury, and that there was a causal link between the dumping and the material injury.

The investigating authority has decided to impose provisional anti-dumping measures in the form of a cash deposit. Starting from July 16, 2018, importers of the products under investigation shall provide the relevant cash deposits to the Customs of the People’s Republic of China according to the deposit rates for each company as determined in this preliminary ruling. Specifically, the deposit rates imposed on Korea Kumho, Korea LG, Japan Zeon, and Japan JSR—China’s major producers of nitrile rubber imports—are 12%, 15%, 30%, and 18.1%, respectively.

Following the preliminary ruling, the investigating authority conducted a further investigation into dumping and the margin of dumping, injury and the degree of injury, as well as the causal link between dumping and injury. As of November 9, 2018, the investigating authority issued a final ruling imposing anti-dumping duties on imports of butadiene nitrile rubber originating from South Korea and Japan. The applicable anti-dumping duty rates are 12% for South Korea’s Kumho, 15% for South Korea’s LG, 28.1% for Japan’s Zeon, and 16% for Japan’s JSR. The duration of these measures is five years, effective from November 9, 2018.

1.3 Butyl Rubber

On August 14, 2017, the Ministry of Commerce of the People’s Republic of China received a formal application for an anti-dumping investigation submitted by Zhejiang Xinhui New Materials Co., Ltd. and Panjin Heyun New Materials Co., Ltd. on behalf of the domestic halobutyl rubber industry. The applicants requested that an anti-dumping investigation be conducted on imported halobutyl rubber originating from the United States, the European Union, and Singapore.

On April 19, 2018, China’s Ministry of Commerce announced that imported halobutyl rubber originating from the United States, the European Union, and Singapore was being dumped, causing substantial injury to China’s domestic halobutyl rubber industry. Consequently, the Ministry decided to impose provisional anti-dumping measures in the form of deposit guarantees. Starting April 20, importers are required to provide corresponding deposit guarantees to Chinese customs based on the dumping margins determined by the ruling—ranging from 26.0% to 66.5% for each company.

On August 10, 2018, China’s Ministry of Commerce announced its final ruling: imported halobutyl rubber originating from the United States, the European Union, and Singapore was found to be dumped; the domestic halobutyl rubber industry had suffered substantial injury; and there was a causal link between the dumping and the substantial injury. Starting from August 20, 2018, anti-dumping duties ranging from 23.1% to 75.5% were imposed on imported halobutyl rubber originating from the United States, the European Union, and Singapore.

In accordance with the Provisions of the Anti-Dumping Regulations of the People’s Republic of China and the Rules for Periodic Reviews of Dumping and Dumping Margins, the Ministry of Commerce has decided to conduct a periodic review of the anti-dumping measures applicable to imported halobutyl rubber produced by ExxonMobil Corporation and ExxonMobil Chemical Co., Ltd., starting from November 20, 2019.

1.4 Chloroprene rubber

Since domestic enterprises first filed applications for anti-dumping investigations in 2003, more than 17 years have passed. During this period, the case featured particularly unusual and complex circumstances, leading to a six-month extension of the investigation. Preliminary rulings were issued at the end of 2004, and final rulings were announced around mid-2005. Subsequently, interim and final reviews were conducted, along with examinations of issues related to the succession of anti-dumping tax rates following corporate name changes. Ultimately, the anti-dumping policy currently in effect was finalized. The specific timeline is as follows:

On September 8, 2003, Chongqing Changshou Chemical Co., Ltd. and Shanxi Synthetic Rubber Group Co., Ltd., representing the domestic chloroprene rubber industry, submitted an application for an anti-dumping investigation. The applicants requested that an anti-dumping investigation be conducted on imported chloroprene rubber originating from Japan, the United States, and the European Union.

On May 10, 2005, the Ministry of Commerce issued Announcement No. 23 of 2005, deciding to impose anti-dumping duties on imports of chloroprene rubber originating from Japan, the United States, and the European Union, with an implementation period of five years.

On August 24, 2010, the Ministry of Commerce issued Announcement No. 49 of 2010, deciding that, effective August 28, 2010, the anti-dumping duty rates applicable to imports of chloroprene rubber originating in Japan would be adjusted as follows: 9.9% for Nippon Electric Chemical Industries Co., Ltd.; 10.2% for Toa Kogyo Ltd.; 20.8% for Showa Denko K.K.; and 43.9% for all other Japanese companies.

On May 10, 2010, the Ministry of Commerce issued Announcement No. 25 of 2010, deciding to conduct a sunset review investigation into the anti-dumping measures on imported neoprene rubber originating from Japan, the United States, and the European Union.

On May 9, 2011, the Ministry of Commerce issued Announcement No. 21 of 2011, ruling that if the original anti-dumping measures were terminated, dumping of chloroprene rubber imported from Japan, the United States, and the European Union into China might continue, and the injury inflicted on China’s chloroprene rubber industry by the imported products under investigation could very likely recur. Therefore, starting from May 10, 2011, in accordance with Announcement No. 23 of 2005 and Announcement No. 49 of 2010, the Ministry decided to continue imposing anti-dumping duties on chloroprene rubber imported from Japan, the United States, and the European Union for a period of five years.

On July 26, 2013, the Ministry of Commerce issued Announcement No. 45 of 2013, deciding that, effective immediately, the anti-dumping duty rate applicable to imported chloroprene rubber originating from Nippon Electric Chemical Industries Co., Ltd. would be adjusted to 20.8%.

On December 25, 2015, the Ministry of Commerce issued Announcement No. 68 of 2015, deciding that, effective immediately, Denka Company Limited would succeed to the 20.8% anti-dumping duty rate and other rights and obligations previously applied to DENKI KAGAKU KOGYO KABUSHIKI KAISHA in the anti-dumping measures on chloroprene rubber. For the investigated products exported to China under the name of DENKI KAGAKU KOGYO KABUSHIKI KAISHA, the 43.9% anti-dumping duty rate applicable to “other Japanese companies” under the chloroprene rubber anti-dumping measures shall apply.

On November 9, 2016, the Ministry of Commerce issued Announcement No. 62 of 2016, deciding that, effective immediately, ARLANXEO Deutschland GmbH would succeed LANXESS Deutschland GmbH in inheriting the 11% anti-dumping tax rate and other rights and obligations applicable to LANXESS Deutschland GmbH under the anti-dumping measures on chloroprene rubber. For products investigated and exported to China under the name of LANXESS Deutschland GmbH, the 151% anti-dumping tax rate applicable to “other EU companies” under the chloroprene rubber anti-dumping measures shall apply.

On May 9, 2016, the Ministry of Commerce issued Announcement No. 18 of 2016, deciding to conduct a sunset review investigation into the anti-dumping measures applicable to imports of chloroprene rubber originating from Japan, the United States, and the European Union, effective May 10, 2016. On May 9, 2017, the Ministry of Commerce issued Announcement No. 19 of 2017, announcing that, effective May 10, 2017, anti-dumping duties would continue to be imposed on imports of chloroprene rubber originating from Japan, the United States, and the European Union for a period of five years.