* Follows finding that they were sold below market value in US
* Argentina says new duties will have little impact
* Indonesia says to contest antidumping duty (Adds Indonesian government official's comment)
By Eric Walsh
WASHINGTON, Oct 23 (Reuters) - The U.S. Commerce Department set preliminary antidumping duties on imports of biodiesel from Argentina and Indonesia, after an initial finding that the products used as motor fuel were being sold at prices below market value in the United States.
The antidumping duties set range from 54.36 percent to 70.05 percent on soy-based biodiesel from Argentina, and 50.71 percent on palm oil biodiesel from Indonesia, the Commerce Department said in a statement on Monday.
Commerce Secretary Wilbur Ross said the Argentine government has asked for negotiations and that the department is working on possible suspension agreements.
Argentina's Foreign Ministry said the new duties would have little impact because preliminary countervailing duties of as much as 64.17 percent that had been applied in August already made "access to the U.S. market impossible."
"A possible application of additional duties has no practical effect in terms of real market access," Argentina's Foreign Ministry said in a statement to Reuters.
The Argentine government was working toward an agreement to suspend both the antidumping and the subsidies investigations, the ministry said.
Indonesia, for its part, will contest the antidumping duty, said Oke Nurwan, a senior trade ministry official in Jakarta.
At the beginning of the investigation by the U.S. Commerce Department, Indonesian exporters were threatened with a 28.1 percent duty, said Nurwan, adding Jakarta will submit its own calculation to the U.S. agency.
"We will fight to counter the U.S. dumping allegation," he said.
President Donald Trump's administration has made enforcement of trade laws a top priority. From Jan. 20, the day Trump took office, through Oct. 23, the Commerce Department said it initiated 73 antidumping and countervailing duty investigations, up 52 percent from the previous year.
U.S. producers of biodiesel petitioned the government earlier this year, saying foreign imports came into the United States below market value, harming domestic makers.
The National Biodiesel Board, a trade group representing producers such as Archer Daniels Midland Co, praised the latest action, saying it had joined the petition to "address a flood of subsidized and dumped imports from Argentina and Indonesia that has resulted in market share losses and depressed prices for domestic producers."
"It is reassuring with each decision that the Commerce Department is reviewing the data and facts at face value," said Doug Whitehead, chief operating officer of the National Biodiesel Board.
Carbio, the Argentine biodiesel industry group that represents producers including Cargill Inc and Louis Dreyfus Co, declined to comment on the antidumping decision. In August, it denied there were subsidies on the country's biodiesel exports and called the duties protectionist.
Argentina's government is negotiating a minimum price for its biodiesel that it hopes could replace punitive tariffs, Horacio Reyser, secretary of international economic relations at the Foreign Ministry, told Reuters last month.
In 2016, imports of biodiesel from Argentina and Indonesia were valued at an estimated $1.2 billion and $268 million, respectively, according to the Commerce Department.
Argentina last year accounted for two-thirds of U.S. biodiesel imports, totaling 916 million gallons (3.5 billion liters), according to U.S. government data.
Commerce Department head Ross said he was hopeful a "negotiated solution" could be found.
"We are thankful to the government of Argentina for their proactive approach to solving this issue, and remain optimistic that a negotiated solution can be reached both with Argentina and with Indonesia," Ross said.
The department is scheduled to make its final antidumping decision around Jan. 3.
The duties need to be upheld by a finding by the U.S. International Trade Commission that the imports harm U.S. producers. Such a finding would lock the duties in place for five years. (Reporting by Eric Walsh; Additional reporting by Michael Hirtzer in Chicago, Caroline Stauffer in Buenos Aires, and Bernadette Christina Munthe in Jakarta; Editing by Lisa Shumaker and Manolo Serapio Jr.)