U.S. escalates tariffs on Moroccan phosphate fertilizers, OCP challenges decision

On Tuesday, the U.S. Department of Commerce (DOC) announced an increase in the tariff rate on Moroccan phosphate fertilizers imported into the United States, escalating trade tensions between the two nations. The DOC’s final decision raised the rate from a preliminary 14.21% to 16.81%, following its second administrative review of the countervailing duty (CVD) order.

This heightened rate, retroactively applied to imports since 2022, sets the new benchmark for cash deposits required by U.S. Customs, potentially extending until 2026 or beyond. The increase follows a U.S. Department of Commerce investigation that deemed OCP, a major Moroccan fertilizer producer, to have received substantial government subsidies. These include benefits such as discounted natural gas, favorable mining rights, tax breaks, regional development programs, and low-interest loans, which allegedly give it an unfair advantage over domestic producers.

OCP criticized the DOC’s methodology and conclusions, arguing that the findings were based on inadequate methodologies and unsupported determinations. The company asserted that the evidence it provided during the review process was overlooked and that there was no legitimate basis for the imposition of CVD tariffs on its exports to the U.S. market.

In response to the DOC’s latest decision, OCP plans to continue its legal challenges, signaling forthcoming appeals to the U.S. Court of International Trade. Despite these challenges, OCP expressed a commitment to maintaining a transparent relationship with U.S. regulatory bodies for any future analyses. “We will continue our full and transparent cooperation with U.S. agencies as they conduct any future analyses,” a company spokesperson stated.

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OCP also highlighted the broader implications of the decision for U.S. agriculture. The company emphasized the critical need for U.S. farmers to have access to diverse, reliable, and high-quality sources of sustainable phosphate fertilizers, crucial for ensuring supply chain resiliency and supporting domestic and global food production.

This tariff adjustment marks another chapter in a longstanding dispute initiated in 2020 by Mosaic, a major U.S. phosphate producer. Mosaic petitioned the DOC to investigate government subsidies for phosphate fertilizers in Russia and Morocco, claiming that these subsidies unfairly disadvantaged U.S. producers. Initially, the DOC imposed a duty of 23.46%, which was later adjusted in subsequent reviews.