What are countervailing duties?

Countervailing duties, similar to anti-dumping is a trade remedy to neutralize foreign economic threat. Specifically, countervailing duties are duties imposed by the U.S. government against tax reduction, grants, bounties, or any other subsidy provided by a foreign government on exported goods.

For example, in our country the government provides corn growers a tax credit whereby they pay them to use their corn for ethanol instead of food.

Who determines if a countervailing duty is applicable?

Same as in the anti-dumping matters, “Commerce determines whether the alleged . . . subsidizing is happening, and if so, the margin of dumping or amount of subsidy. The International Trade Commission determines whether the U.S. industry is materially injured or threatened with material injury by reason of the imports under investigation.”

If the investigation of both agencies finds that goods are provided subsidies, countervailing duties will be implemented in addition to any duties they must pay under normal circumstances – enforcement of the anti-dumping duties via Customs and Border Protection. Countervailing duty is approximately equal to the amount of any subsidy that exists to which is creating harm in the U.S. market.

Happy Importing 🙂


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