{{Trade bloc
Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under
World Trade Organization
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation
in the United Nations System, governments use the organization to establish, revise, and ...
(WTO) rules to neutralize the negative effects of
subsidies
A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...
. They are imposed after an investigation finds that a foreign country subsidizes its exports, injuring domestic producers in the importing country. According to
World Trade Organization
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation
in the United Nations System, governments use the organization to establish, revise, and ...
rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the
GATT
The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its prea ...
Article VI and the GATT Agreement on Subsidies and Countervailing Measures.
Since countries can rule domestically whether domestic industries are in danger and whether foreign countries subsidize the products, the institutional process surrounding the investigation and determinations has significant impacts beyond the countervailing duties.
Countervailing duties in the U.S. are assessed by the
International Trade Administration
:
The International Trade Administration (ITA) is an agency in the United States Department of Commerce that promotes United States exports of nonagricultural U.S. services and goods.
Duties
The ITA's stated goals are to
# Provide practical inf ...
of the
U.S. Department of Commerce
The United States Department of Commerce is an executive department of the U.S. federal government concerned with creating the conditions for economic growth and opportunity. Among its tasks are gathering economic and demographic data for busin ...
which determines whether imports in question are being subsidized and, if so, by how much. If there is a determination that there is material injury to the competing domestic industry, the Department of Commerce will instruct
U.S. Customs and Border Protection to levy duties in the amount equivalent to subsidy margins.
Petitions for remedies may be filed by domestic manufacturers or unions within the domestic industry, but the law requires that the petitioners represent at least 25% of the domestic production of the goods for which competition is causing material injury.
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Import
Customs duties