With the adoption of provisional measures in the case concerning certain alkyl phosphonic acids and their sodium salts originating in China(1), the European Commission has taken a further step in the intensified use of its trade defence instruments. Beyond the traditional finding of dumping practices, this decision is characterised by a key methodological choice: the departure from the lesser duty rule, leading to the imposition of anti-dumping duties exceeding 200% for certain producers.
Far from being insignificant, this decision illustrates a clear shift in EU practice, particularly in the chemicals sector.
Non-application of the lesser duty rule
Traditionally, the European Union applies the so-called lesser duty rule, under which the anti-dumping duty is set at the lower of the dumping margin and the injury margin, provided that such a lower duty is sufficient to remove the injury suffered by the Union industry.
This mechanism, inspired by the WTO Anti-Dumping Agreement, is not strictly mandatory; rather, it reflects a “WTO+” approach, i.e. one that goes beyond the international standard. This more moderate approach, compared to other jurisdictions, has long been viewed as a marker of proportionality.
Since the 2018 reform (Article 7(2b) of the basic anti-dumping Regulation(2)), however, the EU has introduced greater flexibility, allowing the Commission to refrain from applying this rule in certain circumstances, notably where significant distortions affect raw materials (for example through export taxes, quotas or administered prices). Since that reform, the Commission has made increasing use of this possibility, particularly in raw-material-intensive sectors such as chemicals, where input distortions are common.
In the present case, the Commission’s analysis is based on a central finding: producers in the country concerned benefit from access to key inputs at artificially low prices as a result of public intervention (export restrictions, pricing policies, or similar mechanisms). These distortions directly affect production costs and, consequently, export prices.
The Commission first established that the Union industry is suffering injury as a result of low-priced Chinese imports. In the absence of sufficient data, it applied a minimum target profit of 6% to calculate a non-injurious price, leading to the identification of high levels of price undercutting.
The investigation also confirmed the existence of distortions in raw materials in China, notably with regard to phosphorus trichloride (PCl₃), which accounts for more than 17% of the cost of production of the product concerned. This product is subject to a 13% VAT rate in China, with a 0% export rebate during the investigation period. Furthermore, the Commission found that the price of PCl₃ is significantly lower than international levels due to public policies, thereby conferring an economic advantage on Chinese producers.
Despite certain potential impacts on users, the Commission considers that the imposition of duties is in the Union’s interest, given the available production capacities in Europe and the need to secure supply.
A direct consequence: exceptionally high duties
The abandonment of the lesser duty rule has a well-known mechanical effect: it leads to a substantial increase in the level of duties. Indeed, in many cases, the dumping margin significantly exceeds the injury margin.
The present case provides a particularly striking illustration, with duties calculated on the basis of the dumping margin ranging from 182.9% to 219.4% (compared to injury margins ranging from 104.9% to 119%). Such levels reflect not only the scale of the dumping margins identified, but also the cumulative effect of several methodological elements:
- the construction of normal value on the basis of undistorted costs;
- the consideration of inputs deemed to be artificially subsidised; and
- above all, the absence of any cap on the level of duties based on the injury margin.
The result is a measure that no longer merely seeks to remedy the injury suffered by the Union industry, but rather to fully neutralise the advantage derived from dumping.
Among the highest levels in recent practice
The level of duties imposed by this Regulation naturally raises the question of their exceptional nature. In theory, EU anti-dumping duties can reach very high levels, as they are capped only by the dumping margin found.
In practice, duties exceeding 100% do exist, but remain relatively rare, particularly in structured industrial sectors such as chemicals. The 200% threshold therefore represents a particularly high level.
Other cases, including outside this sector, have already resulted in comparable levels in specific circumstances, for example in situations of non-cooperation(3).
Nevertheless, this Regulation clearly falls within the upper range of duties observed and, as such, sends a strong signal to market operators.
A structural shift in the EU’s anti-dumping policy
Beyond the case at hand, the Regulation confirms a broader evolution in EU trade policy. Whereas the Union has historically favoured a measured approach, based on what is strictly necessary to remove injury, it now adopts, where conditions are met, a more assertive stance.
In the chemicals sector, where value chains are heavily dependent on inputs, this approach is likely to expand. The Regulation analysed here therefore appears less as an exception than as an illustration of a new intervention standard, characterised by potentially very high duty levels.
Without overstating the point, this case reflects a fundamental development: the European Union is prepared to make full use of its instruments to address what it considers to be structural dumping situations.
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(1) Commission Implementing Regulation (EU) 2026/1045 of 12 May 2026 imposing a provisional anti-dumping duty on imports of certain alkyl phosphonic acids and their sodium salts originating in the People’s Republic of China (OJ L, 2026/1045, 13.5.2026)
(2) Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (consolidated version as of 11 August 2020)
(3) See, for example, Commission Implementing Regulation (EU) 2025/1711 of 4 August 2025 imposing a provisional anti-dumping duty on imports of seamless high-pressure steel cylinders originating in the People’s Republic of China (OJ L, 2025/1711, 5.8.2025), where duties of 119% were applied due to insufficient cooperation.