Association of Food Industries

2021 NHPDA Report

Andy Sargeantson
Sunland Trading Inc.

The National Honey Packers and Dealers Association and the honey industry as whole are bracing for a rumored move by domestic producers that will harm the entire industry, including them. Rumors are swirling that within days or weeks, domestic producers and beekeepers will file antidumping duty petitions on honey from five countries that make up a large portion of the U.S. honey supply. 

Here’s a quick primer on antidumping/countervailing duties:

Antidumping and countervailing duties are additional fees the government uses to discourage demand for products deemed to be import-sensitive.

What is the difference between AD and CV duties?

Antidumping duties are assessed when it’s determined foreign suppliers or manufacturers are selling goods in the U.S. at a less-than-fair market value. Dumping occurs when goods are sold at a price less than that of the exporter’s home market or at a price lower than the goods’ cost of production. To receive an AD duty, the dumping must be proven harmful to a company or industry in the U.S. The amount of the AD duty is usually calculated to offset the margin of dumping.

Countervailing duties are applicable when a foreign government provides subsidies or assistance to a local industry. This can be in the form of low-rate loans, tax exemptions or indirect payments. The assistance provided is said to enable these suppliers and manufacturers to potentially export and sell the goods for less than domestic companies. After an investigation by the International Trade Commission, a CV duty is assessed based on the value of the subsidy.

Rather than list all the reasons any filing would be lacking in merit, I’ll just say what’s been noted in many studies on antidumping/ countervailing duty actions – they’re ineffective. In most cases, the short-term impact is a rise in prices consumers must pay for the targeted product. Also in most cases, the higher prices and other factors involved in antidumping duty situations encourage increased production and exports from new suppliers in other countries. So instead of the domestic industry competing against imports from x number of countries, it becomes x+2, x+3, etc. That creates a long-term and likely permanent self-inflicted injury for the petitioners.

The U.S. isn’t alone. Countries around the globe have antidumping duty regulations in place. The impacts are the same – they don’t work.

Unfortunately, the honey industry has first-hand knowledge and experience with antidumping and countervailing duties, as orders have been in place since the 1990s on honey from China and Argentina. That gives those of you who aren’t familiar with these orders an idea of the long-term ramifications; they’re not a short-term issue – they often last many, many years.

This time around we were fortunate to have heard the rumors about the potential filing and have spent a great deal of time doing everything we can to prepare. Compare that to the antidumping duty filing a few years ago on olives from Spain. That filing came with no warning and at a time when many were out of their office to attend a trade show that was taking place just before a long holiday weekend. Timeframes are short in antidumping duty investigations, so that really forced the olive industry to scramble.

We, on the other hand, have had time to line up potential legal counsel, speak to that attorney and his partners, provide information to the legal team that should help if a petition is filed and educate importers and suppliers about the process and the need for everyone to participate in the investigation.

Both the olives filings and the potential honey filings serve as concrete examples of the benefit of trade associations. In both instances, AFI or one of its sections was the conduit the sectors used to make sure everyone knew of the gravity of the situation and to put the sectors in the best position possible to defend themselves.

Everyone importing/selling honey will be impacted if this filing takes place (or has taken place before you read this). Though the legal fees to defend the honey sector will be substantial, doing nothing puts the whole sector at risk – so that’s not an option. If you import or sell honey and have questions about the status of the filing, I encourage you to reach out to the NHPDA through the AFI office. I also ask that you consider making a contribution to the defense fund. We need the support of the entire industry to mount our best defense.

Association of Food Industries: Serving the U.S. Food Import Trade Since 1906
3301 Route 66, Ste. 205, Bldg. C • Neptune, NJ 07753
(732) 922-3008 • Fax: (732) 922-3590 • afius.org • info@afius.org