Introduction
For companies looking to bring production back to American soil or start a new business, two recent cases at the US International Trade Commission (ITC or the Commission) have shed light on an existing but rarely used tool that could be critical to fledgling manufacturers. The ITC’s recent material retardation findings in the Chinese tungsten shot case and the Chinese active anode material investigation spotlight how emerging domestic industries can compete against subsidized and dumped imports.
Only a small handful of US trade remedy cases have invoked the material retardation trade law provision, which is intended to protect a domestic industry that has not yet been established. For companies considering reshoring or launching manufacturing operations in the United States, these cases provide both a road map and a powerful tool. The material retardation standard doesn’t require proving existing injury to an established industry - instead, it protects industries in their infancy, preventing unfair competition from strangling domestic production before it can even begin.
The Standard in Plain English: What “Material Retardation” Is—and Is Not
Material retardation represents an approach that is fundamentally different from traditional trade remedy cases. While typical antidumping and countervailing duty investigations require demonstrating harm to an existing industry, material retardation fits situations in which a domestic industry is still taking shape and unfairly traded imports are blocking commercial launch. The Commission treats material retardation as mutually exclusive with injury and threat; an industry is either already established and evaluated under injury or threat, or it is still being established and evaluated under material retardation.
The threshold question asks whether a domestic industry is already established. In answering this question, the Commission evaluates five practical considerations: how long operations have been underway; the nature of the production being performed; the overall scale of the activity; whether the venture has reached a reasonable break-even point; and whether the effort looks more like adding a product line inside an ongoing business than like forming a new industry. The analysis is fact intensive, and none of the considerations are dispositive on their own.
If domestic production has not started at all, the record should show a substantial commitment to manufacturing, not just plans on paper. Executed equipment purchase orders and progress payments, construction contracts and milestones, permits and site readiness, hiring and training tied to startup dates, customer qualification plans, and financing arrangements linked to commencing production each serve as objective signs that a US industry is beyond just the initial planning stage.
Once the establishment question is resolved, the Commission turns to whether imports are materially retarding that establishment. The Commission evaluates the same categories used in injury cases, applied through a startup lens. Volume and market share of subject imports, underselling against domestic offers, and the suppression or depression of price levels needed to launch receive careful attention. Impact is then assessed using indicators familiar to operators: production, shipments, capacity and utilization, inventories, employment and hours, productivity, sales and revenues, operating income and cash flow, capital and R&D spending, access to financing, and other market conditions. Projections from the investment phase versus actual performance often play a central role.
Certain evidence is weighed differently from a conventional material injury case. When evaluating material retardation, the Commission may discount increases in output, shipments or market share, trends that normally may not suggest relief is warranted, because some improvement is expected during the early stages. The key question is whether performance aligns with a reasonable startup trajectory or falls short in ways that would not be reasonably expected. The Commission distinguishes normal startup challenges from patterns showing that imports are delaying customer switching and slowing financing decisions. And the causation analysis focuses on whether subject imports are more than a minimal or tangential cause; imports do not have to be the sole or even primary reason that establishment is being held back.
Case Study 1: Active Anode Material from China (Preliminary, January 31, 2025)
Active anode material is a key precursor for lithium‑ion battery manufacturing. For US entrants that are building anode capacity, the case is notable because the Commission agreed that there is a reasonable indication that imports are materially retarding the establishment of a domestic industry, and advanced the case to a full investigation. Active Anode Material from China, Inv. Nos. 701-TA-752 and 731-TA-1730 (Preliminary), USITC Pub. 5585 (February 2025).
The public record emphasizes certain facts that startups will likely recognize: high and rising subject‑import market shares, underselling and price suppression, limited domestic production from fledgling US facilities, and early‑stage financial metrics consistent with a market that has not yet allowed a domestic foothold. For founders, the key lesson is that the ITC will consider relief before you are fully “established” if the facts show that imports are forestalling commercial takeoff.
From a planning perspective, domestic producers should be especially aware of the ITC’s scheduling of votes and the Department of Commerce’s preliminary subsidy and dumping determinations. This is because preliminary decisions often trigger early market normalization as customers and importers reprice and adjust supply chains in light of the preliminary duties and in anticipation of potential final antidumping and countervailing duty orders.
Case Study 2: Tungsten Shot from China (Final, August 6, 2025)
Tungsten shot is used in specialized ammunition. On August 6, 2025, the Commission reached final affirmative determinations that imports from China materially retarded the establishment of the US tungsten‑shot industry—in one of the few cases to reach a final affirmative retardation finding. Tungsten Shot from China, Inv. Nos. 701-TA-732 and 731-TA-1701 (Final), USITC Pub. 5655 (August 2025). Recently, the Commission issued its public views explaining its decision. In this case, the petitioner asserted that unfairly traded imports from China effectively established the market price, and domestic producers had to meet or beat that price in order to obtain sales. The Commission specifically noted that its traditional pricing analysis may be less probative in a material retardation investigation, demonstrating the special lens through which these retardation cases are assessed. Ultimately, the Commission evaluated the import prices against the domestic industry’s production costs and concluded that the imports were preventing domestic producers from pricing at a level that allowed them to recover their costs of production, let alone make a profit.
The timeline of the case—roughly one year from filing through the final Commission vote—shows how a well‑documented record can yield decisive relief on a schedule that aligns with startup capital and commercialization plans. For companies reshoring production, the signal is clear: The Commission will protect the establishment of domestic production when unfairly traded imports would otherwise keep the market frozen at a pre‑competitive stage.
How Retardation Differs from Injury and Threat—and Why That Matters
Timing and posture drive the legal theory. “Material injury” requires an established domestic industry and proof of present harm. “Threat” looks ahead for an established industry and evidence of imminent harm. “Material retardation,” by contrast, protects the establishment phase itself. If your first production line is commissioning or your facility is mid‑construction, this is the lens that fits. The framing of your evidence should match that reality: Focus on establishment milestones, commercial readiness, and the causal link between unfair import pricing and delayed customer switching or financing.
These case outcomes align with broader US government goals to rebuild critical‑materials and supply chains in the United States. The “material retardation” provision is a targeted tool that helps ensure credible US entrants can establish production when unfairly traded imports would otherwise lock in an unfair status quo. For startups and reshoring programs, that means the legal system recognizes the commercial realities of scale‑up and provides a path to reach sustainable operations.
Conclusion
For founders commissioning first‑of‑their-kind US facilities—and for any company reshoring strategic inputs or other production—material retardation is a practical bridge between pilot and commercial viability. The Active Anode preliminary determination and the Tungsten Shot final determination confirm that the ITC will protect the establishment of US industries when dumped or subsidized imports would otherwise delay or derail that milestone. With the right record and experienced trade counsel, you can accelerate customer switching, unlock financing and secure a durable American foothold.
