What are Antidumping & Countervailing Duties (AD/CVD)?
Importing goods into the U.S. comes with rules designed to ensure fair competition. Two major tools the U.S. government uses to protect domestic industries are Antidumping Duties (AD) and Countervailing Duties (CVD).
What is "Dumping"?
Dumping happens when a foreign company sells a product in the U.S. at a price that is lower than its "normal value." "Normal value" usually means the price the foreign company charges in its own home market, the price it charges in other countries, or a price calculated based on its production costs plus a reasonable profit margin. When foreign producers undercut prices this way, it makes it difficult for domestic businesses to compete fairly.
What is a "Subsidization"?
Subsidization occurs when a foreign government provides financial support to its local businesses or industries to lower their production costs. This aid can include direct cash grants or payments, tax credits and special loans with terms below market rates.
When a foreign government subsidizes its domestic businesses, those companies can export products at artificially low prices, giving them an unfair advantage over non-subsidized competitors.
What are Antidumping and Countervailing Duties (AD/CVD)?AD/CVD are extra tariffs (duties) placed on specific imported goods to offset the effects of unfair pricing practices:
Antidumping Duties (AD): Added to imports that are sold at prices below market value (dumped).
Countervailing Duties (CVD): Added to imports that benefit from unfair foreign government financial assistance (subsidized).
What is the purpose of these duties?
The goal of AD/CVD laws is not to stop trade, but to level the playing field. By taxing unfairly priced or government-subsidized imports, the U.S. offsets the price advantage foreign companies have, protecting domestic industries, job markets, and businesses from being financially harmed.
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