The U.S. Commerce Department on Friday preliminarily determined that producers and exporters from China and Austria sold xanthan gum in the U.S. market at less than fair value, signaling that it may impose punitive duties on the products.

The U.S. Commerce found the products from China and Austria were sold at dumping margins of 21.69 percent to 154.07 percent, and 17.18 percent, respectively. The department is scheduled to make its final determination in May 2013.

Punitive duties would be imposed after both the Commerce and the U.S. International Trade Commission (USITC) make affirmative final rulings. The USITC is expected to make a final decision in May 2013.

The petitioner for the investigation is CP Kelco U.S., Inc. based in Atlanta, Georgia, one of the remaining two U.S. producers of xanthan gum.

Xanthan gum is used as a thickener and stabilizer in three major sectors, i.e. food and beverage products, consumer goods and pharmaceutical products, and oilfield and industrial use. In 2011, imports of xanthan gum from China and Austria were valued at an estimated 64 million U.S. dollars and 25 million dollars, according to the U.S. Commerce data.

The U.S. move came at a time when protectionism is reviving in the country amid sluggish economic recovery. It was widely believed that such actions would hurt U.S.-China trade relations that are increasingly critical to global economic recovery.

The Chinese Ministry of Commerce has repeatedly urged the United States to abide by its commitment against protectionism and work together with China and other members of the international community to maintain a free, open and just international trade environment.