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U.S. Department of Commerce Finds Hard Empty Capsules from China Are Sold Below Fair Value

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The U.S. Department of Commerce (Commerce) has made a preliminary decision that hard empty capsules from the People’s Republic of China (China) are being sold in the United States for less than fair value. This notice was published in the Federal Register on May 29, 2025. The period of investigation covered April 1, 2024, through September 30, 2024. Commerce invites interested parties to comment on this preliminary finding.

Background

Commerce started this investigation on November 20, 2024. The preliminary determination, initially scheduled earlier, was postponed to May 22, 2025. The full details about the events and methodology can be found in the related Preliminary Decision Memorandum, which is available online for registered users.

Scope of the Investigation

The investigation covers hard empty capsules from China. These are capsules made of two prefabricated, hollow cylindrical sections (cap and body). They are unfilled and composed of at least 80 percent water-soluble, non-toxic polymer that is fit for human or animal use, such as gelatin, HPMC (hydroxypropyl methylcellulose), or pullulan. The capsules may include colorants, opacifiers, plasticizers, and other additives. They are included regardless of size, material, markings, or how they are imported (together or separately).

The subject capsules are typically classifiable under subheadings 9602.00.1040 and 9602.00.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). Other possible subheadings include 1905.90.9090 (general), 3503.00.5510 (gelatin capsules), 3923.90.0080 (HPMC capsules), and 2106.90.9998 (pullulan capsules). However, the written scope description is controlling.

Product Coverage and Scope Comments

Commerce provided time for parties to comment on product coverage. It received and reviewed comments but did not change the scope as a result. Further guidance and the summary of comments are found in the Preliminary Scope Decision Memorandum.

Methodology

The investigation follows section 731 of the Tariff Act. Since China is treated as a non-market economy, Commerce calculated export prices and normal values using rules specific to such countries. In the case of Shandong Healsee Capsule Ltd. (Shandong Healsee), Commerce applied facts available with adverse inferences to estimate dumping margins.

Separate Rate Companies and China-wide Entity

Commerce granted separate rates to certain companies not individually examined. For companies not selected for individual examination, the rate is based on a weighted average of the rates for the main examined exporters, Shandong Healsee and Shanxi JC Biological Technology Co., Ltd. (Shanxi JC). The same rate was given to the China-wide entity.

Preliminary Dumping Margins

The following are the estimated weighted-average dumping margins:

  • Shandong Healsee Capsule Ltd.: 172.24%
  • Shanxi JC Biological Technology Co., Ltd.: 5.40%
  • Guizhou Guang De Li Pharmaceuticals Co., Ltd.; Hebei Kangxin Plant Capsule Co., Ltd.; Hubei Kornnac Pharmaceutical Co., Ltd.; Jiangsu Lefan Capsule Co., Ltd.; Jiujiang Angtai Capsule Co., Ltd.; Qingdao Yiqing Biotechnology Co., Ltd.; Shaanxi Genex Bio-Tech Co., Ltd.; Shanghai Guang De Li Capsule Co., Ltd.; Shanxi Guangsheng Medicinal Capsule Co., Ltd.; Shaoxing Kangke Capsule Co., Ltd.; Shaoxing Renhe Capsule Co., Ltd.; Xinchang County Hexin Capsule Co., Ltd.; Xinchang County No.6 Capsule Factory; Shaoxing Kangke Capsule Co., Ltd.; Zhejiang Huaguang Capsule Co., Ltd.; Shanxi Guangsheng Capsule Co., Ltd.; Zhejiang Pujiang Enerkang Capsule Co., Ltd.; Yantai Oriental Pharmacap Co., Ltd.; Ningbo Capsulcn Capsule Co., Ltd.; Shaoxing Zhongya Capsules Industry Co., Ltd.; Shandong Healsee Capsule Ltd.; Zhejiang Guangjuyuan Biotechnology Co., Ltd.; Zhejiang Huaguang Capsule Co., Ltd.; Zhejiang Huili Capsules Co., Ltd.; Zhejiang Lujian Capsule Co., Ltd: 88.82%
  • China-wide Entity: 88.82%

Liquidation and Cash Deposit

U.S. Customs and Border Protection (CBP) will suspend liquidation of the subject merchandise entered or withdrawn from warehouses for consumption on or after May 29, 2025. Cash deposits will be required in amounts equal to the above margins.

Verification

Commerce will verify the data used in its final decision, as provided in section 782(i)(1) of the Act.

Public Comments

Parties can submit briefs or comments after the last verification report is issued. Rebuttal briefs must be filed no later than five days after the initial brief. Each brief and rebuttal should begin with an executive summary for each issue, limited to 450 words per issue. Parties who want a hearing must make a written request within 30 days of the publication of this notice.

Postponement of Final Determination

Following requests from Shandong Healsee, Shanxi JC, and the petitioner (Lonza Greenwood LLC), the final determination has been postponed. The final determination will be made no more than 135 days after May 29, 2025.

International Trade Commission Notification

Commerce will notify the U.S. International Trade Commission (ITC) of this preliminary finding. If the final determination is affirmative, the ITC will decide whether imports are causing harm or threaten harm to the U.S. industry.

Official Issuance

This notice was issued by Christopher Abbott, Deputy Assistant Secretary for Policy and Negotiations, on May 22, 2025.

All further details, including scope definitions and a list of topics discussed in the preliminary memorandum, can be found in the official Federal Register notice and its appendices.


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