Antidumping and Countervailing Duties; A Hidden “Land Mine”

With the growing number of trade remedy actions that have been taken of late I believe it is important to take a look at two types of trade remedies that have been in existence for quite some time and that are having a growing impact on international trade. These trade remedies are Anti-Dumping Duties (ADD) and Countervailing Duties (CVD).

ADD are additional duties that are assessed against specific products from specific countries where the U.S. Government has determined that the foreign suppliers are selling the products at below “fair market value” or “dumping” those products into the U.S. market. Needless to say the methodology used to determine “fair market value” is complicated and in some cases may seem quite arbitrary as well. Simply put, if the U.S. believes that foreign suppliers of a product are selling below fair market value the U.S. will assess anti-dumping duties to offset this unfair trade practice. Anti-dumping duties can be very severe, often adding duty equal to several times the value of the imported product.

An example of anti-dumping duty is the ADD that is assessed against imports of wood bedroom furniture from China. The percentages are quite high, in fact some are over double the value of the goods. This would mean that a wood bedroom furniture set imported from China with a value of $500 would have ADD of over $1,000 assessed against it!

CVD is an additional duty that is assessed against imported products where the U.S. has determined that the foreign country’s government is assisting their exporters through subsidies or other payments or incentives to export. While CVD rates are usually much lower than ADD rates they can still be 20% or more in some cases. Importers can be forced to be CVD in addition to the ADD they are paying making it a double whammy.

The U.S. keeps a list of products and countries that are subject to ADD and CVD though it can be hard to understand and apply it to your products. Because of the complexity of the ADD and CVD we highly recommend you contact us if you have any specific questions or concerns. . Please contact us at info@tradelogicintl.com to arrange a phone consultation.

Customs fully expects importers to exercise due diligence and reasonable care and will penalize companies that fail to properly determine if ADD or CVD applies to their imported products so that those duties are paid when required. Don’t take the risk; contact us today.