What are Anti-dumping and Countervailing Duties & Answers to Frequently Asked Questions

Updated on July 18, 2023

anti-dumping and countervailing duties

Much of the focus within importing services and freight logistics management has been on finding new and innovative ways to automate procedures. Automation within custom regulations and import processes helps to standardize the preparation, validation, and submission of payments, reports and records to reduce errors and maintain profitability. International shipping importers especially must remain mindful of current market trends and regulations. This ensures administrative cost savings, better asset security, and fewer penalties. Automating antidumping and countervailing duty checks and payments can also help streamline the importing process and reduce expenses for those handling goods across the border, whether road, air, or ocean freight.

What Are Anti-dumping and Countervailing Duties?

To understand the impact antidumping and countervailing duties and expenses have and how important they are to the importing and supply chain network, shippers must first understand what they are. They exist to cap the impact practices known as dumping and countervailing have on the market.

Dumping essentially occurs when someone outside the country sells a product in the United States and has it imported at a price below “normal value.” The goal is to earn more money by suddenly making their product the most profitable for consumers and the most attractive to buyers.  The standard product value may be the price the manufacturer would typically sell it for in their own country or another country, or it may be an estimated value based on the cost of manufacturing and shipping plus a markup for a small profit. 

For example, a company sells computer chips and normally charges $5 per chip. Dumping occurs if they attempt to sell a considerable load of those chips in the US for only $2 per chip. In response, the US or the computer niche market using those chips may realize the industry is being harmed by this sudden influx of super cheap components. Therefore, a countermeasure may be imposed to address this concern and offset the impact felt by shipping routes and trade lanes. Countervailing duties, also known as anti-subsidy duties, are trade import duties imposed by the World Trade Organization to offset the adverse effects of dumping and related subsidies.

What Steps Do Importers Need To Follow? 

Duties related to antidumping and countervailing are often referred to as AD/CVD. Rulings change yearly and can be lengthy. In many cases, reviewing payments and arguments can take three years to determine final duty liability. Importers want to minimize these situations and protect their investments and profit lines.

Importers are required by law to pay duties, taxes, and fees owed on imports into the United States, including AD/CVD duties. Importers cannot take part in any efforts to evade anti-dumping countervailing duties and orders by intentionally declaring an incorrect country, product classification, artificially reduced product value, or any other means of circumventing dumping and countervailing liability. Missing duties, not making payments, or underpaying can lead to much higher expenses, further straining and complicating importers' cash flow management and financial planning. Current AD/CVD information is available through the International Trade Administration website.

Anti-Dumping and Countervailing Duties FAQ

Dealing with the legalities of meeting antidumping/countervailing duties and regulations is a complicated process. Importers and those coping with freight subject to AD/CVD regulations likely have many questions. Some of the most common include:

Why do these duties and regulations exist?

Antidumping and countervailing duties exist to offset the value of dumping and/or subsidization to keep a level and fair playing field for domestic industries and improve customs clearance in regions that might be adversely affected by unfairly traded imports.

How does the ITC determine injury?

The act of determining if an industry is materially injured or threatened with such as a result of the dumped or unfairly subsidized imports falls to the International Trade Commission. To reach their decision, the ITC considers all relevant economic factors such as market strength, current niche market trends, and more. Further information on the process is available at the ITC’s website

What role does the CBP play in this?

Customs and Border Protection enforces the AD/CVD laws on imported goods.  They monitor imports, note which shipments fall under AD/CVD regulations, and ensure payments are collected. CBP utilizes significant national assets from across the agency to enforce AD/CVD laws and will often work with other agencies to protect the import and export supply chain and domestic market.

When does the suspension of liquidation start?

Suspension of liquidation of entries and collection of AD/CVD cash deposits will begin once the ruling has been reached in the AD/CVD investigation, most often the preliminary shipping and logistics determination made by the CBP.

What are critical circumstances?

Every case is different; sometimes, a claim arises that needs special consideration and the application of a critical circumstance. A finding of essential circumstances is a vital tool to offset possible import surges while an active AD/CVD investigation is underway to prevent exporters and importers from flooding the market during the ‘limbo’ of investigation.

Who sets the duty rates within AD/CVD?

The International Trade Administration's Enforcement and Compliance department works to help calculate the AD/CVD rates and establishes the scope of AD/CVD orders. The CBP then works to enforce these decisions and collects the AD/CVD on container shipping and other imports. 

How can I find what products fall within AD/CVD orders?

Shippers and importers can find AD/CVD information through the ITC, which publishes a list of every AD/CVD case here. The website of Commerce’s ITA includes a listing for “Products currently subject to AD/CVD Orders,” which also contains AD/CVD information and updates by country.

How a Managed Service Container Marketplace Aids Importers to Manage Customs Clearance Processes

As the International Trade Administration noted, “Unfair foreign pricing and government subsidies distort the free flow of goods and adversely affect American business in the global marketplace. Enforcement and Compliance, within the International Trade Administration of the Department of Commerce, enforce laws and agreements to protect U.S. businesses from unfair competition within the United States, resulting from unfair pricing by foreign companies and unfair subsidies to foreign companies by their governments.” 
USA importers must be mindful of these practices and know the current regulations and requirements concerning anti-dumping and countervailing duties. Working with industry experts is the best way to avoid costly mistakes and errors with import duties and restrictions. Answer the anti-dumping and countervailing duties question confidently and contact FreightMango today to learn more about automating the importing process.

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