US Commerce Department Announces Preliminary Countervailing Duty Determination on Dissolving Pulp from Brazil
The U.S. Department of Commerce has issued a preliminary determination in its countervailing duty (CVD) investigation of high purity dissolving pulp from Brazil, finding that Brazilian producers are receiving subsidies. This action follows the initiation of the investigation on September 8, 2025, and comes amidst ongoing trade actions and adjustments to U.S. Tariffs as delegated to the executive branch by Congress.
Background
The investigation was initiated under section 703(b) of the Tariff Act of 1930, as amended. Deadlines for the preliminary determination were adjusted due to a lapse in appropriations and a subsequent federal government shutdown, which tolled administrative proceedings by a total of 68 days.[1] The preliminary determination was ultimately issued on March 19, 2026.
Scope of the Investigation
The investigation covers high purity dissolving pulp, defined as having an alpha cellulose percentage of 90 percent or higher and a brightness level of 90 percent or higher. This includes pulp derived from various cellulose fiber sources and produced through chemical pulping processes. The scope likewise encompasses finished or processed products in third countries containing the subject merchandise.[2] Excluded from the scope are products with an intrinsic viscosity under 455 milliliters per gram and cotton linters pulp consisting of at least 90 percent cotton linters fibers.
Methodology and Findings
Commerce conducted the investigation in accordance with section 701 of the Tariff Act. The Department found evidence of financial contributions by the Brazilian government that benefit recipients, constituting subsidies. In reaching these findings, Commerce relied, in part, on facts available and drew adverse inferences where appropriate due to perceived limitations in the Government of Brazil’s response to information requests.[3]
Alignment with Antidumping Duty Investigation
The final CVD determination will be aligned with the final determination in a companion antidumping duty (AD) investigation of dissolving pulp from Brazil, based on a request from the petitioners.[4] Both determinations are currently scheduled to be issued no later than August 3, 2026.
Preliminary Duty Rates
Commerce preliminarily determined the following estimated countervailable subsidy rates:
| Company | Subsidy rate (percent ad valorem) |
|---|---|
| Bracell Bahia Specialty Cellulose S.A. | 3.67 |
| All Others | 3.67 |
Suspension of Liquidation and Cash Deposits
In accordance with the Tariff Act, U.S. Customs and Border Protection (CBP) will suspend liquidation of entries of dissolving pulp from Brazil entered or withdrawn from warehouse for consumption on or after the date of publication of this notice in the Federal Register. CBP will also require cash deposits based on the estimated subsidy rates.[5]
Next Steps
Commerce will disclose its calculations and analysis to interested parties. Interested parties may submit case briefs and rebuttal briefs, and a hearing may be held. The U.S. International Trade Commission (ITC) will make a final determination regarding whether imports of dissolving pulp from Brazil are materially injuring, or threaten material injury to, the U.S. Industry.[6]
This investigation is part of a broader pattern of presidential actions regarding tariffs, utilizing authority delegated by Congress. The Tariff Act of 1930 remains the foundational legislation, but changes to U.S. Tariffs have been primarily driven by executive branch actions since that time.[7]
Dated: March 19, 2026.
Christopher Abbott,
Deputy Assistant Secretary for Policy and Negotiations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance.
Appendix I
Scope of the Investigation
The merchandise subject to this investigation is high purity dissolving pulp, which is a dissolving pulp with an alpha cellulose percentage of 90 percent by weight or higher on an oven dry basis, as calculated by: alpha cellulose percentage = (100-S10) + 0.5*(S10-S18) where S10 and S18 values are determined by International Organization for Standardization (ISO) 692:1982, and having a brightness level of 90 percent or higher, as measured by ISO 2470-1:2016. High purity dissolving pulp may be derived from any virgin or recycled cellulose fiber source (including, but not limited to, those sourced from hardwoods, softwoods, woody crops, agricultural crops/byproducts/residue, and agricultural/industrial/other waste). High purity dissolving pulp may be produced from a chemical pulping process including without limitation a kraft (sulfate) pulping and/or sulfite pulping process.
High purity dissolving pulp can be shipped in any form, including, but not limited to, a liquid slurry or in any dried form such as flakes, powder, granules, pellets, shreds, rolls and sheets.
The scope includes merchandise matching the above description that has been finished, packaged, or otherwise processed in a third country, including but not limited to processes such as commingling, blending, diluting, repackaging, or any other process that would not otherwise remove the merchandise from the scope of the investigation if performed in the subject country. The scope also includes high purity dissolving pulp that is commingled or blended with high purity dissolving pulp from sources not subject to this investigation. Only the subject component of such commingled or blended products is covered by the scope of this investigation.
Excluded from the scope is high purity dissolving pulp with an intrinsic viscosity under 455 milliliters per gram (mL/g), as measured by ISO 5351:2010.
Also excluded from the scope is cotton linters pulp that consists of at least 90 percent by weight, on an oven-dried basis, of cotton linters fibers.
High purity dissolving pulp products are classified under subheadings 4702.00.0020 and 4702.00.0040, of the Harmonized Tariff Schedule of the United States (HTSUS). High purity dissolving pulp products may also enter under subheadings 4706.30.0000 or 4706.92.0100. Reference to the HTSUS classifications are provided for convenience and customs purposes, and the written description of the merchandise under investigation is dispositive.
Appendix II
List of Topics Discussed in the Preliminary Decision Memorandum
- I. Summary
- II. Background
- III. Injury Test
- IV. Diversification of Brazil’s Economy
- V. Subsidies Valuation Information
- VI. New Subsidy Allegations
- VII. Use of Facts Otherwise Available and Adverse Inferences
- VIII. Analysis of Programs
- IX. Recommendation
[7] Presidential 2025 Tariff Actions
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