After the U.S. government initiated an investigation of dumping capsules from a variety of countries, the Department of Commerce has issued a preliminary determination regarding Chinese capsule manufacturers. It has been determined that hard empty capsules, imported from China, have been sold in the United States at less than fair value, as outlined in the official announcement by the U.S. Department of Commerce.
Preliminary Results Support Findings of Dumping
On May 29, 2025, the U.S. Department of Commerce announced its preliminary determination in the ongoing antidumping investigation initiated in November 2024, covering hard empty capsules from both China and Brazil. In China, preliminary margins range from 5.40% to 172.24%, with the majority of exporters receiving a margin of 88.82%, indicating significant underpricing. Brazil was assigned a uniform margin of 34.10%, applicable to all producers. As of June 2025, cash deposit requirements based on these margins are being enforced at the time of import, affecting all capsule types and materials.
What is Effective Immediately?
Effective June 2025, imports of hard empty capsules from China are subject to cash deposit requirements that reflect the determined dumping margins. Importers must now deposit significant duties, up to 88.82%, at the time of entry for capsules from most Chinese manufacturers. These duties apply to all capsule sizes and materials, including gelatin, HPMC, and pullulan.
Expect The Final Determination in the Fall of 2025
The final determination has been formally delayed to October 2025. If the final determination is consistent with the preliminary determination, the next step is for the International Trade Commission (ITC) to determine whether or not the imports materially injured the U.S. capsule industry. If this is positive, the duties will exist for years to come.
What Does This Mean for Capsule Customers: Nutraceutical and Pharmaceutical Companies?
For manufacturers that were sourcing capsules from Chinese suppliers, a key factor has now changed: the required cash deposits, potential for cost increases, and delays based on customs clearance. This will create further challenges to the cost and regulatory environment, as nutraceutical and pharmaceutical companies must now contend with further uncertainty as they navigate their sourcing strategies.
The Case for Regional Manufacturing
As trade dynamics shift, more and more brands are turning towards suppliers that have regionalized manufacturing and warehousing. CapsCanada, as a manufacturer of empty capsules in North and South America, has Gelatin and HPMC capsules free of those trade issues and maintains the highest-quality and global standards in regulatory requirements. By nearshoring supply and having manufacturing close to our customers, we can provide shorter lead times, availability, and assurance in an uncertain market.
Stay ahead of the changes
With a changing political economy with stricter regulations in play, anticipation is key. Evaluating suppliers that are outside the scope of anti-dumping measures ensures operational continuity and a competitive advantage.
The Department of Commerce's preliminary ruling marks a turning point for any company sourcing capsules from Asia. With final decisions still down the road, it is critical to stay ahead of the next steps to prepare your operations going forward.
As the case progresses, CapsCanada will keep you updated every step of the way.
