27. Antidumping And Countervailing Duties

 

27. Antidumping And Countervailing Duties 

Antidumping (AD) and countervailing (CVD) duties are additional duties that  may be assessed on imported goods intended for sale in the United States at  abnormally low prices. These low prices are the result of unfair foreign trade practices  that give some imports an unearned advantage over competing U.S. goods. 

Dumping is the practice of trying to sell products in the United States at lower  prices than those same products would bring in the producer’s home market. Dumping  also includes trying to sell a product in the United States at a price lower than it cost to  manufacture that item. Subsidizing is the practice by some governments of providing  financial assistance to reduce manufacturers’ costs in producing, manufacturing or  exporting particular commodities. Countervailing duties may be assessed to “level the  playing field” between domestic and subsidized imported goods. However, to meet the  criteria for assessing antidumping or countervailing duties, the imported merchandise  must, in addition to being subsidized or sold at less than fair value, also injure a U.S.  industry. 2 

The Department of Commerce, the International Trade Commission (ITC), and  U.S. Customs and Border Protection each have a role in administering and enforcing  antidumping and countervailing duty laws. 

The Commerce Department is responsible for the general administration of these laws.  Commerce determines whether the merchandise is being sold at less than fair value,  whether it has been subsidized, and what percentage rate of duty will be assessed. The  ITC determines whether the product poses an injury3 to a particular U.S. industry.  CBP assesses the actual duties⎯the amount⎯based upon the rate set by the  Commerce Department once the ITC has determined that the import injures a  particular industry. 

 In general, the following processes must be completed before AD or CVD  duties are established. 

Antidumping and countervailing duty investigations are usually initiated by the  Commerce Department through the petition process. A domestic industry or another  interested party such as a trade union or industry association petitions the department,  although occasionally the Commerce Department may also initiate an investigation. If  the party seeking the investigation also wants the ITC to test for injury, that party must 2 CVD cases apply only if the foreign country is a signatory to the World Trade Organization's Agreement on  Subsidies and Countervailing Measures. 

3 . Section 771(7)(a) of the Tariff Act of 1930 defines material injury to a U.S. industry as “harm [that] is not  inconsequential, immaterial, or unimportant.” simultaneously⎯on the same day⎯file the petition with both the Commerce Department and  with the ITC. 

If the petition contains the necessary elements, the Commerce Department and  the ITC will initiate separate investigations that will yield preliminary and final  determinations. If appropriate, the Department of Commerce will issue either an  antidumping or countervailing duty order and will assess whatever AD or CVD duties  the investigation determines are appropriate. 

If a test is required for injury to a domestic industry, the ITC will make the  first, preliminary determination concerning the likelihood of injury. If that  determination is negative, there will be no further investigation or action by the ITC. If  it is affirmative, however, the Commerce Department will issue its preliminary  determination regarding sales (antidumping) or subsidy (countervailing duty) issues. 

After additional review by the Commerce Department and analysis of public  comments received in the case, Commerce will issue its final duty determinations. If  either determination (AD or CVD) is affirmative, Commerce will direct CBP to  suspend liquidation of entries for the merchandise subject to the investigation and to  require cash deposits or bonds equal to the amount of the estimated dumping margin  (the differential between the fair market value and the U.S. price) or the net subsidy. 

After this step, the ITC follows with its final injury determination. If this  determination is also affirmative, Commerce will issue an antidumping or  countervailing duty order. At that time, Commerce will also direct CBP to collect,  with a very limited exception for new shippers, cash deposits of estimated duties.  A negative final determination either by Commerce or the ITC would 

terminate the investigations, and that termination would remain final for this particular  inquiry. Both agencies announce their determinations, including orders and the results  of the administration reviews (described below), in the Federal Register. 

Each year during the anniversary month of the AD or CVD order, interested  parties may review the order with respect to the individual producers or resellers it  covers. This review generally looks at the 12 months preceding the anniversary month,  but the first review can also include any period for which the suspension of  liquidations was directed prior to the normal 12-month period. 

If no annual review is requested, Commerce will direct CBP to continue 

collecting deposits and assessing duties on the subject merchandise at the cash or bond  rate in effect on the date of entry, and to continue requiring deposits at that rate for  future entries of such merchandise. If a review is requested, Commerce will conduct a  review similar to its original investigation, issue revised rates for duty assessment and  deposits, and instruct CBP to collect duties and liquidate entries according to the  results of its latest review.