Intro to AD/CVD Duties Video Transcript
Trade Remedies, also known as antidumping and countervailing duties, are one way that the United States Government can make sure that everyone has an equal opportunity to sell goods in the US market. But what exactly are antidumping and countervailing duties? And how and when does the US government use them?
Whether youâre an importer, producer, or just a member of the public, this video will give you the basics to understanding these important tools.
There are two types of duties-antidumping and countervailing, also called AD and CVD. Antidumping duties, also called AD, are used when foreign companies sell their products in the U.S. for less than fair value, also referred to as dumping. Countervailing duties, also called CVD, are imposed to counter unfair subsidies, which is assistance given by foreign governments to their own companies. With this unfair financial help, foreign companies can afford to sell their products in the U.S. at less than fair value. Both dumping and subsidization lead to foreign companies selling their product in the U.S. market for less than fair value. Both dumping and subsidization undercut U.S. producersâ prices and push them out of business, thereby taking over the market and increasing prices.
The Petition and Initiation
In order to decide whether or not duties should be imposed on a product, the domestic industry must petition the U.S. Department of Commerce (or DOC) to Conduct AD and/or CVD investigations. Investigations begin if the DOC determines, after 20 days of review, that the petitions meet the statutory standards for initiation. The standards for initiation include evidence that dumping an/or subsidization of a product is occurring, and that the domestic industry is being injured as a result. These petitions must be filed with the DOC and International Trade Commission (or ITC) because they both play a role in the investigations.
Prelim & Final*
If the DOC initiates the investigations, there is a 20-day window after the initiation for public commentary on the scope, i.e. the description of the product.
In addition, after the initiation, the DOC will issue questionnaires to foreign producers and/or exporters to analyze sales and costs to see if dumping/subsidization is occurring.
45 days after the petition is filed, the ITC will make its first preliminary determination on whether the industry is being harmed. If affirmative, the DOC continues their investigation. If negative, the DOC will terminate their investigations. If the ITCâs preliminary determination is affirmative, the DOC will continue their analysis and announce their preliminary determinations based on the information collected in the questionnaires. If it is an AD case, DOCâs preliminary determinations will be 140 days from initiation, and if it is a CVD case, it will take place 65 days from initiation. After announcing the preliminary determination, duties based on DOCâs investigation will begin to be collected once the decision is posted in the Federal Register.
The DOCâs final determinations in the investigations are scheduled to be announced 75 days after their preliminary determinations.
Finally, the ITC will give its final determination 45 days from the DOCâs final determination. If they do find injury and the DOC also confirmed dumping/subsidization, then the duty order is imposed.
There are three situations in which the investigation could be terminated. This is during the ITC preliminary determination, the DOC final determination, or the ITC final determination. If it is terminated, any duties already collected will be returned. The whole process can take up to a year to complete.
Post-Order
Once a duty order is issued, there are routine follow-up investigations in place. Every year, the order can undergo an administrative review where a particular foreign exporter/producerâs imports from the previous year are reviewed, and their duty rates are adjusted accordingly. These reviews must be requested by an interested party. Every five years, the order undergoes a Sunset Review. If, during the Sunset review, the DOC finds that dumping/unfair subsidization is not occurring and/or the ITC finds that damage or harm is no longer happening in the US industry, the order is terminated. In addition, if an importer is unsure of whether their product falls under the scope, they can file a scope ruling.
Conclusion
The United States maintains the most open and transparent ADCVD investigations in the world and conducts it all in accordance with US statute, regulations, and international obligations. From start to finish, all of ITAâs decisions are published in the Federal Register and ITA also has the Antidumping and Countervailing duty Centralized Electronic Service System, or ACCESS, which maintains the most complete record of the investigation. If you have interest in a specific investigation, use a guest login for ACCESS to view the relevant documents. For more information, please call the Communications Office at 202-482-0063.
