The Order Never Covered the Acid

The scope of the 2021 countervailing duty order on phosphate fertilizers from Morocco closes with a list of eleven products the order does not reach.

Fire extinguisher powder is on it. So is trisodium phosphate, and so is baking powder.

Item eleven is phosphoric acid, chemical formula H3PO4.

Yesterday morning CHS and OCP North America announced a phosphate fertilizer plant at the Cornerstone Energy Park in Waggaman, Louisiana. Up to $450 million, over 1 million metric tonnes a year, and by the release's own account the first phosphate fertilizer plant built in this country since 1984.

The same release says what the plant runs on: "the OCP Group will supply phosphoric acid to the facility."

"What actually crosses the border once the granule is made in Louisiana?"

The exclusion list is the design document

The scope of C-714-001 is drawn wide on purpose. It covers phosphate fertilizers in solid or liquid form, granular or prilled or powdered, with or without anti-caking additives. It names MAP, DAP, normal superphosphate and TSP by chemical formula, then reaches past them to NPS, NPK, nitrophosphate and ammoniated superphosphate formulations, and it catches the whole article, non-phosphorous nutrients included, at any P2O5 content of 5% or more by actual weight.

Then it stops.

Nothing about that boundary is hidden. Commerce wrote it into the order in April 2021 and has re-published it in every notice since:

• Item (11), phosphoric acid, H3PO4. Excluded.
• Item (4), liquid ammonium polyphosphate fertilizers. Excluded.
• Items (2) and (3), industrial and technical grade MAP and DAP in white crystalline form above stated P2O5 thresholds. Excluded.

So the customs question is which line the phosphorus crosses on. Moroccan DAP enters at HTSUS 3105.30.00.00, where the general rate of duty is Free, which means the countervailing duty is the entire charge on that entry. Merchant acid enters at 2809.20.00, where the general rate is Free and the column 2 rate is also Free, and the fertilizer-grade statistical line 2809.20.00.10 exists specifically for acid under 65% available P2O5, reported in metric tons.

A plant in Waggaman moves the P2O5 from the first line to the second.