Commerce Department Issues Preliminary Countervailing Duty Determination in Fatty Acids Case

The U.S. Department of Commerce today issued preliminary countervailing duty determinations in the investigations of vegetable-based fatty acid imports from Indonesia and Malaysia. The rate sets the cash deposit importers must pay while the investigations continue; a preliminary antidumping determination is expected in mid-September, with final determinations in both cases to follow in the first quarter of 2027. The Coalition for Affordable Ingredients, representing manufacturers, importers, and farmers who rely on these imports, opposes the AD/CVD petitions filed in this case by Vantage, a tallow-based producer of fatty acids.

Below is a statement from John Gurley, partner at ArentFox Schiff LLP, on behalf of the Coalition.

“Commerce's preliminary determination sets countervailing duty rates at roughly 16.5% for Indonesia, the largest exporter, with lower rates for Malaysia. While we commend Commerce for taking a more measured approach, rather than accepting Vantage's inflated claims at face value, these high rates, based on a somewhat unorthodox methodology, will inflict significant harm on U.S. customers by increasing prices. American consumers, manufacturers, and farmers should not pay for Vantage’s strategic mistakes.

“We continue to believe this case lacks merit. Vantage, a small U.S. company, is the sole public petitioner among five domestic producers of these fatty acids. Its alleged economic losses stem from its own strategic choices, not import competition. Vantage’s domestic feedstock cannot replace vegetable-based fatty acids for the many U.S. manufacturers and customers who require vegan, kosher, halal, or cruelty-free certification. Nor does any U.S. producer make fatty acids that dairy farmers require.

“We are extremely concerned about where this proceeding is headed. Preliminary antidumping determinations are expected in mid-September. Any significant AD rate, together with today's countervailing duty rate, could impose final rates above 20 percent that will put many family-owned dairy farms out of business and raise costs for consumers as downstream companies absorb and pass on these new tariffs.

“The pending Section 301 tariffs on Indonesia and Malaysia compounds this problem. U.S. manufacturers and farmers who rely on these imports face multiple tariff regimes landing on the same goods at the same time. We urge Commerce and USTR to weigh the impact of this cumulative burden.    

“Affected exporters and importers will continue to cooperate fully with this investigation, and we believe the record will show that Vantage's troubles stem from changing consumer preferences and poor business planning, not unfair trade practices.”

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The Coalition for Affordable Ingredients (CAI) is a coalition of American manufacturers and farmers across the personal care, household cleaning, food, and dairy nutrition industries that depend on certified vegetable-based fatty acids imported from Indonesia and Malaysia as essential, irreplaceable inputs. CAI opposes the AD/CVD petitions filed by Vantage Specialty Chemicals, which, if successful, would impose steep tariffs on these imports, raise prices for U.S. consumers, and cause lasting harm to American manufacturers, farmers, and jobs. Learn more at www.affordableingredients.org.