The US Places a 50% Provisional Anti-Dumping Tariff On SA Lemon Juice

The US has placed an anti-dumping tariff of 50% on South African (SA) lemon juice entering the country due to concerns about a glut in lemon juice stocks from the African nation. The duty is provisional as the United States International Trade Commission (USITC) continues its investigations to determine the extent of dumping. Current estimates place the level at 74%, which is high enough for further sanctions on SA exporters.

This recent tax imposition by the US is the latest development in a saga spanning ten months: following an influx of lemon juice exports from SA to the US in 2021 owing to rising demand and increased production, Ventura Coastal, a US citrus juice processor, approached the USITC with lemon juice dumping allegations on SA exporters, leading to the initial investigation. These allegations, filed on Dec-21, claimed that SA lemon juice suppliers were dumping their products into the US at below fair value, causing lemon juice prices in the US to drop significantly, squeezing competitors out of the market.

In Feb-22, the USITC intensified its investigations and extended the deadline to Jun-22. To date, proceedings are still ongoing. However, the USITC has published a preliminary report stating its findings. The report mentions that leading lemon juice processors in SA have elevated dumping rates. Cape Fruit Processors have a dumping rate of 55.67%, and Granor Passi, a juice processing company from Polokwane, has a dumping rate of 74.04%. Other companies under investigation have a combined rate of 55.67%.

The provisional duty placed by the US could derail SA’s lemon juice exports. The US is a leading lemon juice market, and the levy could make it too expensive for SA exporters to supply the North American nation. Previously, SA suppliers enjoyed a competitive advantage in the market due to the low tariff specified in the Africa Growth and Opportunity Act (AGOA). However, the recent anti-dumping duty could result in losses for SA suppliers and create a vacuum for their US counterparts to exploit. In turn, SA lemon juice exporters could shift to alternative markets such as Canada and the Americas.

In response to the recent anti-dumping levy placed by the US, the South African Fruit Juice Association plans to request a postponement of the proceedings from the USITC, a move mirroring that of Brazil, another country facing anti-dumping investigations. The levy will expire when the USITC issues a final judgement, at which point, the tariff could be elevated to 128.61%.