On June 18, 2019, the U.S. Department of Commerce initiated several investigations to determine whether imports of Chinese HFCs were circumventing the 2016 antidumping duty order on HFC blends. Since 2016, importers have begun blending Chinese HFC components, including R-125, R-32, R-134a, and R-143a, in third countries and in the United States. Importers have also begun importing blends that do not meet ASHRAE specifications and completing those blends in the United States by adding small amounts of HFC components to bring the blends in specification. The U.S. Department of Commerce's initiation notices signal that it will investigate all of these efforts to circumvent U.S. law and evade antidumping duties.

The U.S. Department of Commerce initiated investigations with respect to Chinese HFC components that are blended in the United States, Chinese and Indian HFCs that are blended in India, imports of a patented HFC blend that are converted into a standard (non-patented) product after importation, and imports of semi-finished blends that are finished in the U.S. to meet industry standards. The U.S. Department of Commerce's action follows several requests by domestic and foreign parties for rulings to clarify the scope of the antidumping duty order.

These requests were triggered by some staggering statistics that show a 260 percent increase in the volume of these HFC components, which the American HFC Coalition says are now threatening the survival of a U.S. industry. Direct imports of HFC components now exceed the volume of imports of HFC blends in 2016, when the original antidumping duty order was published. Less than three years after the antidumping duty order was published in August 2016, Chinese imports of HFC refrigerants are greater than ever.

Members of the American HFC Coalition developed the HFC refrigerants to replace first-generation refrigerants such as R-12 and R-22. HFC blends today are the most-used refrigerant in residential air conditioners and cool homes without depleting the ozone layer. Members of the American HFC Coalition have more recently developed the next generation of refrigerants, HFOs. If Chinese imports continue to be dumped in the U.S. market, American manufacturers will no longer have the capability to develop future generations of these products. Despite the antidumping orders, China's enormous capacity continues to grow. Imports of single component HFCs are flooding the U.S. market and depressing prices below the cost of production. Without relief, U.S. producers will not have sufficient return on investment to build plants and hire workers in the United States.

The American HFC Coalition trusts that the investigations will uncover the relentless efforts by Chinese exporters and importers to escape the antidumping duty order and continue to flood the U.S. market with unfairly low-priced HFC refrigerants and apply the full extent of the law. The organization expects that the U.S. Department of Commerce will proceed quickly with its investigations and will issue final determinations within 300 days.

Publication date: 7/2/2019

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