CUSTOMS ENFORCEMENT | 2026-09-24

Critical Circumstances on Large Diameter Graphite Electrodes From China — Suspension Reaches Back to May 1, 2026

A preliminary affirmative finding under section 703(e) pulls entries made 90 days before the preliminary determination into the cash deposit requirement, for named producers and for everyone else.

On September 24, 2026 the U.S. Department of Commerce published a preliminary affirmative determination of critical circumstances in the countervailing duty investigation of large diameter graphite electrodes from the People's Republic of China, case number C-570-221. The period of investigation is January 1, 2025 through December 31, 2025. The operative consequence is retroactive: Commerce intends to direct CBP to suspend liquidation of unliquidated entries made on or after May 1, 2026 — 90 day

On September 24, 2026 the U.S. Department of Commerce published a preliminary affirmative determination of critical circumstances concerning large diameter graphite electrodes from the People's Republic of China, in countervailing duty case C-570-221. The determination is applicable September 24, 2026, and the period of investigation is January 1, 2025 through December 31, 2025. Interested parties are invited to comment.

For importers supplying electric arc furnace steelmakers, foundries and related operations in California, this is a determination whose practical effect has already happened — it reaches entries made months ago.

What a critical circumstances finding actually does

A critical circumstances determination is not a finding about the product or the subsidy. It is a finding about timing — specifically, that imports surged in a way that would blunt the remedy if duties applied only from the ordinary date.

The ordinary rule is that suspension of liquidation begins when a preliminary determination publishes. That creates a predictable incentive: once a petition is filed and the timetable is public, bring in volume before the preliminary lands. Critical circumstances is the statutory answer, and its effect is to move the start line backwards by up to 90 days.

Here Commerce acted under section 703(e)(2)(A) of the Tariff Act of 1930, as amended, and 19 CFR 351.206.

The date that matters: May 1, 2026

Commerce states that for Dantan New Materials, Shanxi Juxian, and all other producers and exporters, it intends to direct U.S. Customs and Border Protection to suspend liquidation of any unliquidated entries of subject merchandise from China entered, or withdrawn from warehouse for consumption, on or after May 1, 2026 — 90 days prior to the publication date of the preliminary determination in the Federal Register.

For those entries, CBP is to require a cash deposit equal to the estimated preliminary subsidy rates established in the preliminary determination. The suspension remains in effect until further notice.

Note who this covers. It is not limited to the two named companies. The reach-back applies to all other producers and exporters as well, which means an importer sourcing from a Chinese producer it has never heard discussed in this proceeding is nonetheless inside it.

Why importers keep being caught by this

The recurring misunderstanding in trade remedy practice is that a determination operates from the day it is announced. It frequently does not, and September 2026 has produced three separate illustrations for California importers:

Critical circumstances on solar cells from India reached back to January 28, 2026 — 90 days before that preliminary determination. A circumvention finding on compacted graphite iron brake drums from China reached back to January 27, 2026, the initiation date of the inquiry. A third-country circumvention finding on garment hangers assembled in Cambodia reached back to August 12, 2025, over thirteen months.

Each used a different statutory mechanism, and each produced the same commercial result: entries cleared without incident months earlier turned out to carry duty liability.

The lesson is procedural rather than legal. Petitions, initiations and preliminary determinations are public when they publish. An importer whose compliance function monitors Federal Register activity in its own product area learns about exposure while it can still act; one that does not learns about it from a CBP notice.

What is still open, and what is not

This is a preliminary determination, and Commerce invites comment. Under section 703(f) of the Act it will notify the U.S. International Trade Commission. Commerce may reach a different conclusion in its final determination, and interested parties who believe the import surge has an innocent explanation — a contracted project, a plant outage, ordinary seasonality — should make that record now rather than later.

What is not open is the operational position in the meantime. Suspension of liquidation and the cash deposit requirement apply to entries from May 1, 2026 forward, and they remain in effect until further notice.

What importers of graphite electrodes should do

First, identify every entry of subject merchandise made on or after May 1, 2026 and determine which remain unliquidated. Those are the entries the suspension reaches.

Second, identify your actual producer, not merely your seller. The reach-back applies to all producers and exporters, so a trading company's name on the invoice does not tell you whether you are inside the determination.

Third, model the cash deposit against the preliminary subsidy rates and check bond sufficiency. A retroactive deposit obligation on several months of entries is a working capital event, and an insufficient continuous bond becomes its own enforcement problem independent of the duties.

Fourth, confirm scope. "Large diameter graphite electrodes" is defined by the scope language in the notice, and whether a particular electrode diameter, grade or connecting pin falls inside it is a question to settle from specifications. A documented tariff classification and scope position is what makes that answer defensible if CBP asks.

Fifth, review your contracts. Where a retroactive duty lands on entries already sold through, the question of who bears it is a contractual one, and agreements written before this proceeding frequently do not address it. In the absence of an allocation, it falls on the importer of record.

Sixth, if you receive a CF-28 request for information or CF-29 notice of action touching these entries, treat it as the start of a documented process rather than routine correspondence. What you say about producer identity and product specification at that stage tends to frame everything that follows.

The wider position for steel-sector importers

Graphite electrodes are a consumable input to electric arc furnace steelmaking, so this determination reaches companies whose primary business is not importing at all — steelmakers and foundries buying a consumable through a distributor. Those buyers are often furthest from the trade remedy process and least likely to be monitoring it.

If you buy electrodes through a distributor, the questions worth asking this week are simple: who produced them, in which country, and has the distributor considered whether the May 1 reach-back applies to the entries behind your last several deliveries.

Trembach Law Firm advises importers, distributors and industrial buyers on AD/CVD exposure, critical circumstances reach-back, and the CBP enforcement that follows. To assess how this determination affects your entries, call (818) 514-7680 or contact a customs defense attorney. Importers moving cargo through the San Pedro Bay complex can reach our Long Beach port practice directly.

Frequently Asked Questions

How far back does this determination reach?

Commerce intends to direct CBP to suspend liquidation of unliquidated entries entered, or withdrawn from warehouse for consumption, on or after May 1, 2026 — 90 days before the preliminary determination published. Cash deposits are required at the estimated preliminary subsidy rates, and the suspension remains in effect until further notice.

Does it only apply to the two companies named?

No. The suspension covers Dantan New Materials, Shanxi Juxian, and all other producers and exporters. An importer buying from a Chinese producer never mentioned in the proceeding is still inside it.

What does a critical circumstances finding actually decide?

It is a finding about timing rather than about the product or the subsidy. The ordinary rule is that suspension begins when the preliminary determination publishes, which creates an incentive to import heavily before that date. Critical circumstances is the statutory answer, and it moves the start date back by up to 90 days.

Is this final?

No. It is a preliminary determination and interested parties are invited to comment. Commerce will notify the International Trade Commission under section 703(f) and may reach a different conclusion in its final determination. The suspension and deposit requirement operate in the meantime.

I buy electrodes through a distributor, not directly. Does this reach me?

It can. Graphite electrodes are a consumable input to electric arc furnace steelmaking, so the duty exposure sits with whoever is the importer of record. The questions worth asking your distributor are who produced the electrodes, in which country, and whether the May 1 reach-back applies to the entries behind your recent deliveries.

This article is provided for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Trade remedy proceedings turn on the specific producers, products and entry records involved, and no particular outcome is guaranteed. Consult a qualified attorney about your own circumstances.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

Trembach Law Firm | 27001 Agoura Road, Suite 350, Calabasas, CA 91301