US updates duties on Chinese honey

The United States has set $2.63 per kilogram as its preliminary rate for renewed duties against Chinese-made honey, seven months after concluding that removal of decade-old anti-dumping tariffs would likely hurt American producers.

In a notice late last week, the Commerce Department's International Trade Administration said the duty covers imports from China in four product categories: natural honey, flavored honey, artificial honey containing over 50 percent natural honey by weight, and preparations of natural honey containing over 50 percent natural honey by weight.

The action follows a determination in November by another part of the department, the International Trade Commission, that domestic beekeepers and packers were likely to suffer "material injury" if the US lifted duties on Chinese honey. The "dumping" duties, intended to punish Chinese exporters for allegedly shipping honey at prices below the cost of production, were initially set in 2001, at rates of between 26 percent and 184 percent, depending on the producer.

This was the second renewal of the tariffs, the first coming in 2008 at a rate of $2.06 per kilogram.

The American Honey Producers Association, the US industry's main lobbying group, accused Chinese producers and export companies of trying to exploit the need for imports to meet about half of the US market's demand for honey. The association pushed for the renewed duties in response to what it says has been a 75 percent increase in output by Chinese producers since the original 2001 anti-dumping duties.

The latest renewal follows a Commerce Department review of honey imports between December 2011 and November 2012.

"None of the Chinese exporters whose honey shipments to the US market during that period provided Commerce with the information the agency requested," Michael Coursey, a lawyer with the Washington firm Kelley Drye & Warren LLP who represented the American Honey Producers Association in the case, told China Daily. "As a result, Commerce has preliminarily determined that those exporters are not independent of the Chinese government, and has indicated that it will assign those exporters that government's rate in the final results of the review."

The preliminary findings and tariffs are open for public comment for 30 days, until about July 20.

So far, Chinese companies affected by the import tariffs haven't challenged the duties' renewal.

The US actions come amid official recriminations both inside and outside of China about the nature of what Chinese honey producers are selling. China is the world's biggest producer of honey and a major exporter.

In a report two weeks ago, national broadcaster China Central Television said police in the southwestern city of Chongqing had detected a production site for fake honey and confiscated some 500 kilograms of bogus nectar. CCTV's report, which cited chemical analysis showing the product seized contained no real honey but had 187 milligrams of aluminum residue per kg, was widely circulated on Chinese social-media websites as the latest example of "food forgery" in the country.

In the US, customs and trade authorities have cracked down on what observers have dubbed "honeygate" or "honey laundering" - believed to be the largest investigation of food fraud in the country's history.

Federal prosecutors in February accused two of the biggest US honey processors - Honey Solutions of Texas and Groeb Farms Inc of Michigan - of buying illegal Chinese imports of the product in order to avoid being assessed tens of millions of dollars under the anti-dumping duties. The companies were fined a total of $3 million but, under deferred-prosecution agreements, won't face further penalties if they don't repeat the conduct alleged.

Also charged were five individuals, including four US honey brokers, who prosecutors say took part in a scheme that led to the evasion of more than $180 million in duties and the sale of honey containing an antibiotic not approved in the US.

Coursey and another Kelley Drye lawyer, Benjamin Blase Caryl, wrote that the honey scandal is "just the tip of the iceberg", although they didn't single out China.

"Schemes like this result in legitimate importers and the domestic honey-producing industry enduring years of unprofitable operations, with some even being put out of business," they said. "Dozens of other commodities are imported into the United States under false descriptions or origins, costing the US taxpayer billions of dollars in lost import duties."