Updated April 11, 2017
Trade Remedies: Antidumping and Countervailing Duties
Overview
in the statute. The ITA evaluates the petition, decides
What are they? Antidumping (AD) and Countervailing
whether to initiate an investigation, determines whether
Duties (CVD) address unfair trade practices by providing
dumping or subsidies exist, and calculates the amount of
relief to U.S. industries and workers that are “materially
dumping (dumping margin) or subsidy. If an investigation
injured,” or threatened with injury, due to imports of like
results in final affirmative determinations by both agencies,
products sold in the U.S. market at less than fair value
the ITA issues an AD or CVD order directing U.S. Customs
(AD), or subsidized by a foreign government or public
and Border Protection (CBP) to collect duties on the
entity (CVD).
imported merchandise.
What is the relief provided? At the end of an investigative
Figure 1. Overview of AD/CVD Investigations
process, in AD cases, the remedy is an additional duty
placed on the imported merchandise to offset the difference
between the price (or cost) in the foreign market and the
price in the U.S. market. In CVD cases, a duty equivalent to
the amount of subsidy is placed on the imports.
Who conducts AD and CVD investigations? The U.S.
International Trade Commission (USITC) determines if a
U.S. industry has suffered material injury; and the
International Trade Administration of the Department of
Commerce (ITA) determines the existence and amount of
dumping or subsidy.
What is the statutory authority for AD and CVD
investigations? AD and CVD laws are found in Title VII of
the Tariff Act of 1930 (19 U.S.C. 1671-1677n, as
amended). U.S. laws and those of other World Trade
Organization (WTO) members must comply with
obligations under the WTO Antidumping and Subsidies
Agreements.
Supporting Views—Supporters of AD and CVD actions
say that they are necessary to shield U.S. industries and
workers from unfair competition, and that they help to
increase public support for additional trade liberalization
measures.

Opposing Views—Opponents, including some importers
What is the role of the International Trade
and downstream consuming industries, say that AD/CVD
Commission? The USITC determines whether a U.S.
actions create inefficiencies in the world trading system by
industry “is materially injured, or is threatened with
“artificially” raising prices on imported merchandise. Some
material injury, or the establishment of an industry in the
U.S. exporters are also concerned because U.S. products are
United States is materially retarded,” due to sales of the
subject to these AD/CVD actions in foreign markets.
targeted merchandise in the U.S. market.
Process
What are the steps in the investigative process?
How are AD and CVD investigations conducted?
Initiation. After a petition is filed simultaneously with the
Investigations are conducted through an administrative
ITA and the USITC, the ITA generally has 20 days to
process (see Figure 1) within specified time limits, which
determine if the petition has enough information and
can be extended under certain conditions. Each phase of an
industry support to initiate an investigation. If the ITA
investigation is notified in the Federal Register.
decides not to initiate, the petition is denied and the
proceedings end.
What is the role of the International Trade
Administration? The ITA is the “administering authority”
USITC Preliminary Determination. If the ITA initiates the
investigation, the USITC investigates whether there is a
“reasonable basis to believe or suspect” that the U.S.
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Trade Remedies: Antidumping and Countervailing Duties
industry has suffered material injury. The USITC normally
revoked; and the USITC conducts a similar review to
has 45 days from the filing of the petition to make its
determine whether injury to the domestic industry would be
preliminary finding. If affirmative, the investigation
likely to continue or resume.
continues at the ITA. If negative, the investigation ends.
Figure 2. U.S. AD/CVD Orders In Force by Country
ITA Preliminary Determination. The ITA conducts its
preliminary investigation to consider whether there is a
“reasonable basis to believe or suspect” the existence of
dumping or subsidies. If affirmative, the ITA estimates the
amount of dumping or subsidies, directs U.S. Customs and
Border Protection to suspend liquidation (collection of final
duties) on the targeted merchandise and to collect bonds or
cash deposits from importers covering the estimated
amount. Whether negative or affirmative, the investigation
continues on to the final ITA phase. Preliminary
determinations take from 60-130 days from the initiation
date in CVD cases, and from 100-190 days in AD cases.
ITA Final Determination. Following the preliminary phase,
the ITA continues its investigation to determine whether the
targeted merchandise has been dumped or subsidized. In
CVD investigations, the final determination must generally
be made within 75 days of the ITA preliminary
determination; in AD cases, 75-135 days after the
preliminary determination. If affirmative, the investigation

continues to the final stage at the USITC. If negative, the
investigation is terminated.
Issues for Congress
Enforcement. Some in Congress assert that CBP
USITC Final Determination. The investigation concludes at
ineffectively enforces AD/CVD orders by not promptly
the USITC for the final injury phase. The Commission has
investigating duty circumvention allegations and under-
45-75 days to make its final determination. If negative, the
collecting duties. P.L. 114-125, the Trade Facilitation and
investigation ends. If affirmative, the ITA issues an AD or
Trade Enforcement Act of 2015, in part, required that CBP:
CVD order.
(1) investigate AD/CVD duty evasion based on a time line;
(2) more efficiently collect and verify data on importers;
AD or CVD Order Issued. The ITA issues an AD or CVD
and (3) base importer’s bond amounts on risk. Executive
order instructing U.S. Customs and Border Protection
Order 13785 (March 31, 2017) required risk assessments
(CBP) to collect cash deposits for estimated duties owed on
for bonds, and strengthened bond requirements for new
all entries of the targeted merchandise.
importers of goods subject to AD/CVD duties and those
who have not paid AD/CVD duties on time. It is too early
Reviews
to tell if these recent actions have improved enforcement.
Are AD and CVD orders permanent? No. Orders are
subject to several types of review, which could result in the
WTO Rules and Disputes. AD/CVD actions are subject to
dumping or subsidy margin being adjusted up or down. A
WTO dispute settlement, and the United States has acted as
review could also lead to continuation or revocation of an
both complainant and respondent in WTO disputes. One
AD or CVD order.
current WTO case, brought by China, challenges the U.S.
application of “non-market economy” (NME) methodology
What is an administrative review? Each year, during the
to China. The ITA uses NME calculations in AD/CVD
anniversary month of the publication of an AD or CVD
investigations if it determines that a country’s economy
order, an interested party may request that the ITA conduct
does not operate under market principles.
a review of an order to determine the actual amount of AD
or CVD duties to be paid on the entries.
Potential Member Involvement. The quasi-judicial
investigative process in U.S. law may indicate that
What is a changed circumstances review? Interested
Congress intended AD/CVD actions to be conducted apart
parties may also request that the ITA review an AD or CVD
from political influence. However, AD/CVD investigations
order if they have questions about whether an order still
also involve constituents—either U.S. petitioning
applies; for example, if the U.S. industry is no longer
companies, or U.S. importing companies possibly harmed
interested in covering certain products, or if the business
by trade remedy actions. Thus, Members are sometimes
structure of the foreign manufacturer has changed.
asked to write letters or testify at hearings on either side of
a trade remedy action to support a constituent’s cause.
What is a “sunset” review? No later than once every five
years, the ITA and USITC must review each AD or CVD
Vivian C. Jones, Specialist in International Trade and
order. The ITA determines whether dumping or subsidies
Finance
would be likely to continue or resume if the order is
IF10018
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Trade Remedies: Antidumping and Countervailing Duties


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https://crsreports.congress.gov | IF10018 · VERSION 4 · UPDATED

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