Customs Brokerage Question of the Month

Customs Question of the Month

Q: What are Anti-Dumping and Countervailing Duties?

A: Antidumping (AD) and Countervailing Duties (CVD) are intended to offset the value of dumping and/or subsidization, thereby leveling the playing field for domestic industries taking a hit by unfairly traded imports. “Dumping” occurs when foreign manufacturers sell goods in the United States less than fair value, causing injury to the U.S. industry. AD cases are company-specific; their duties are calculated to bridge the gap back to a fair market value. CVD cases are established when a foreign government provides assistance and subsidies, such as tax breaks to manufacturers that export goods to the U.S., enabling the manufacturers to sell the goods cheaper than domestic manufacturers. CVD cases are country-specific, and the duties are calculated to duplicate the value of the subsidy. When either of these occurs, petitions are filed by U.S. manufacturers or businesses with the International Trade Commission (ITC). If the ITC finds evidence of injury to the U.S. industry, the Department of Commerce (DOC) investigates. If the results are positive, CBP withholds liquidation of entries and collects AD/CVD duties. The entries are not liquidated until the DOC instructs CBP headquarters to do so. It becomes costly to import articles flagged Anti-Dumping and Countervailing, not only for the additional duties but also for the Customs bonds and management of these entry types.

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