Large Power Transformers From Korea: Zero AD Margins

Preliminary zero dumping margins for large power transformers from Korea create a favorable signal for two major producers, but they do not immediately reduce importer obligations. Customs brokers, utilities, developers, and trade compliance teams must distinguish the preliminary calculations from the cash deposit and liquidation consequences that follow final results.

What the Preliminary Antidumping Results Mean

The Commerce Department preliminarily calculated weighted-average dumping margins of 0.00 percent for HD Hyundai Electric Co., Ltd. and Iljin Electric Co., Ltd. in the 2024-2025 administrative review of large power transformers from Korea. The period of review covers entries from August 1, 2024, through July 31, 2025, under antidumping proceeding A-580-867.

Hyundai and Iljin were selected as mandatory respondents, meaning Commerce examined their sales and cost information directly. The preliminary results therefore address their transactions during the review period, subject to verification, briefing, possible corrections, and final agency determinations.

Rates for Examined and Non-Examined Companies

The zero preliminary margins do not create a single rate for every Korean producer or exporter. The applicable treatment depends on the company associated with an entry and whether that company has an established rate.

LS Electric Co., Ltd. and Hyosung Heavy Industries Corporation, which were not selected for individual examination, preliminarily retain the 4.32 percent rate currently in effect. Because both mandatory respondents received zero preliminary margins, Commerce did not calculate a positive review-specific average from the examined companies for assignment to the non-selected respondents.

Companies without their own established rate generally remain subject to the 22.00 percent all-others rate from the original investigation. Importers and brokers should therefore avoid treating Korean origin alone as sufficient to determine the correct antidumping rate. Producer, exporter, scope, and case-rate relationships must be evaluated at the entry level.

These findings remain preliminary. Commerce intends to verify respondent information, and the final calculations may change based on verification findings, case briefs, rebuttal briefs, or ministerial corrections. The zero margins are commercially significant, but they are not yet final duty rates.

Cash Deposits and Entry Exposure Remain in Place

The immediate operational point is straightforward. Current antidumping cash deposit rates continue to apply until final results become effective. A preliminary 0.00 percent margin does not authorize an importer or customs broker to begin entering covered merchandise at a zero antidumping rate.

Cash deposits secure estimated liability on current entries. Assessment rates determine the antidumping duties ultimately owed on entries covered by the review period. Although the two concepts are related, they operate at different stages and should not be treated as interchangeable.

Modeling the Final Liability

Importers should model review-period exposure under more than one outcome. A useful analysis generally compares the preliminary zero margins, the rates currently in effect, and a reasonable adverse scenario reflecting potential changes before final results. That comparison should be performed by importer, producer, exporter, entry date, entered value, and deposited antidumping amount.

For Hyundai and Iljin entries covered by the review, final zero assessment results could potentially support liquidation without antidumping duties, subject to Commerce's final methodology and liquidation instructions. Deposits already paid may then become refundable after liquidation, generally with applicable interest. Until that process occurs, the deposited amounts should remain recorded as contingent trade liabilities rather than recognized as certain recoveries.

Importers must also address the reimbursement certification required under 19 CFR 351.402(f)(2). Failure to provide the required certification can generally create a presumption of reimbursement and may lead to doubled antidumping assessments. Brokers can support filing execution, but the importer remains responsible for the accuracy and legal sufficiency of its certification.

Commerce plans to verify respondent information. Case briefs are expected seven days after the final verification report, with rebuttal briefs generally due five days later. If publication occurs on November 2, 2026, hearing requests would generally be due by December 2, 2026, subject to confirmation against the official filing schedule.

Compliance Priorities for Transformer Importers

Large power transformers are high-value, project-critical assets with long procurement cycles. Even a modest rate difference can create material financial exposure, while a 22.00 percent all-others rate can significantly alter landed cost. Trade compliance controls should therefore begin before purchase orders are finalized, not after transformers arrive at a U.S. port.

Importers should confirm that commercial documents consistently identify the producer, exporter, country of origin, and relevant product specifications. They should also evaluate scope coverage independently from tariff classification. An article can potentially fall within an antidumping order even when internal product descriptions, procurement categories, or classification assumptions suggest otherwise.

Separating Antidumping Duties From Drawback-Eligible Duties

The review also has an important duty drawback consequence. Antidumping and countervailing duties are not eligible for drawback under 19 U.S.C. 1677h. A future reduction, refund, or liquidation adjustment involving antidumping deposits should not be treated as drawback recovery.

Ordinary customs duties paid on the same entries may still qualify for drawback when the merchandise is exported or destroyed, or when it is used in the manufacture of exported articles, provided the applicable drawback requirements are satisfied. Drawback calculations should therefore separate ordinary customs duties from antidumping and countervailing duty amounts at the entry-line level.

This distinction is especially important when finance systems record all border payments in a single duty account. Combining duty types can overstate drawback potential, contaminate claim calculations, and complicate reconciliation when antidumping entries liquidate. Importers and brokers should preserve entry summaries, payment records, product data, export evidence, and manufacturing records in a structure that supports both antidumping review analysis and drawback substantiation.

Transformer supply constraints and heightened scrutiny of bulk-power equipment further increase the value of disciplined data management. Procurement, engineering, compliance, finance, and brokerage teams should use consistent product and party data so that commercial urgency does not override scope review, deposit accuracy, or post-entry recovery controls.

Frequently Asked Questions

Did the Preliminary Results Eliminate Antidumping Duties?

No. The preliminary results calculated 0.00 percent margins for Hyundai and Iljin during the review period, but existing cash deposit requirements remain in effect until the final results are published and become operative. Final assessment consequences also depend on Commerce's final calculations and liquidation instructions.

What Rate Applies to LS Electric and Hyosung?

LS Electric and Hyosung preliminarily retain the 4.32 percent rate currently in effect. They were not individually examined, and both mandatory respondents received zero preliminary margins. Their treatment may still change in the final results, depending on Commerce's final analysis.

When Does the 22.00 Percent All-Others Rate Apply?

The 22.00 percent all-others rate generally applies to producers or exporters that do not qualify for their own company-specific rate. Importers should confirm the producer-exporter combination for each transaction because the exporter named on an invoice does not always establish eligibility for a lower rate.

Can Importers Request Refunds Based on the Zero Margins?

Not immediately. Preliminary results do not themselves trigger refunds of cash deposits. Any refund generally depends on final results, company-specific assessment calculations, liquidation instructions, and U.S. Customs and Border Protection's liquidation of the covered entries.

Are Antidumping Duties Eligible for Duty Drawback?

No. Antidumping and countervailing duties are not drawback-eligible. Ordinary customs duties paid on the same imported merchandise may remain eligible if the relevant export, destruction, substitution, or manufacturing requirements are met. Claim calculations should keep each duty type separate.

What Should Customs Brokers Do Now?

Brokers should continue using the currently effective deposit instructions, validate producer and exporter data, monitor final review developments, and help clients identify affected entries. They should not change antidumping rates solely because the preliminary margins are zero. Brokers supporting drawback activity should also exclude antidumping and countervailing duty amounts from drawback calculations.

How Stable Software Can Help

Broker-Controlled Duty Drawback Technology

Antidumping reviews demonstrate why drawback programs need clear separation between ordinary customs duties and non-drawback-eligible AD/CVD amounts. DrawbackAI is Stable Software's flat-license duty drawback software for U.S. customs brokers. Brokers can white-label the software for importer clients and file drawback claims under their own filer codes.

Stable Software charges a flat software license and never takes a percentage of the refund. This model allows customs brokers to maintain control of client relationships and claim filing while avoiding a recovery-based software fee. Brokers evaluating drawback opportunities for transformer importers can consider DrawbackAI as part of a structured approach to identifying eligible ordinary duties without including antidumping or countervailing duty payments.

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