Importer Says Chinese Xanthan Gum Input Substantially Transformed in Canada
Importer Gum Products International filed a pair of complaints at the Court of International Trade on July 17 to contest the Commerce Department's scope rulings concerning the company's oilfield equipment lubricant and food ingredient products. In both scope determinations, Commerce said the importer's products fall under the scope of the antidumping duty order on xanthan gum from China (Gum Products International v. United States, CIT #'s 25-00108, -00109).
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Regarding Gum Products' food ingredient products, the company asked for a scope ruling concerning three types of products, known as "GPI Purexan 80AN, GPI Purexan 200AN, and GPI Quickxan 70." The importer said it submitted evidence showing that the products, which use Chinese xanthan gum as a raw material, are "custom-made food ingredient products that are produced in Canada to meet individual customer specifications and are sold directly to food manufacturers or specialty ingredient distributors."
Gum Products said its products aren't the same "class or kind of merchandise" as Chinese xanthan gum and that the Chinese input used in its product is "substantially transformed through the proprietary process in Canada, which deactivates the amylase in the xanthan gum, adds significant value, and makes the products unique and non-substitutable."
Commerce disagreed, finding that the Chinese xanthan gum isn't substantially transformed in Canada. At the trade court, Gum Products argued that the agency's decision isn't based on substantial evidence and is "inconsistent" with the International Trade Commission's injury determination, which didn't consider "downstream products" like Gum Products' food ingredient products.
Regarding the oilfield equipment lubricant, Gum Products similarly said it makes the lubricant using Chinese-origin xanthan gum but that the final products substantially transform that input in Canada "to meet individual customer specifications and are sold directly to oilfield drilling customers." The importer said Commerce used "circular reasoning" in addressing the company's arguments and finding that the oilfield equipment lubricant products were the same "class or kind of merchandise" covered by the order.