

Updated January 11, 2021
Trade Remedies: Antidumping and Countervailing Duties
Overview
What is the role of the International Trade
What are they? Antidumping (AD) and Countervailing
Commission? The USITC determines whether a U.S.
Duties (CVD) address unfair trade practices by providing
industry “is materially injured, or is threatened with
relief to U.S. industries and workers that are “materially
material injury, or the establishment of an industry in the
injured,” or threatened with injury, due to imports of like
United States is materially retarded,” due to sales of the
products sold in the U.S. market at less than fair value
targeted merchandise in the U.S. market.
(AD), or subsidized by a foreign government or public
entity (CVD).
What is the role of the International Trade
Administration? The ITA is the “administering authority”
What is the relief provided? At the end of an investigative
in the statute. The ITA evaluates the petition, decides
process, in AD cases, the remedy is an additional duty
whether to initiate an investigation, determines whether
placed on the imported merchandise to offset the difference
dumping or subsidies exist, and calculates the amount of
between the price (or cost) in the foreign market and the
dumping (dumping margin) or subsidy. If an investigation
price in the U.S. market. In CVD cases, a duty equivalent to
results in final affirmative determinations by both the ITA
the amount of subsidy is placed on the imports.
and the USITC, the ITA issues an AD or CVD order
directing U.S. Customs and Border Protection (CBP) to
Who conducts AD and CVD investigations? The U.S.
collect duties on the imported merchandise.
International Trade Commission (USITC) determines if a
U.S. industry has suffered material injury. The International
Figure 1. Overview of AD/CVD Investigations
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/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.
What is the value of goods currently subject to AD and
CVD orders? In fiscal year 2018, $24.2 billion of imported
goods were subject to AD/CVD and U.S. Customs and
Border Protection (CBP) collected approximately $2.3
billion in AD/CVD deposits.
Supporting Views. Supporters of AD/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
and downstream consuming industries, say that AD/CVD
actions create inefficiencies in the world trading system by
“artificially” raising prices on imported merchandise. Some
U.S. exporters are also concerned because U.S. products are
subject to these AD/CVD actions in foreign markets.
Process
What are the steps in the investigative process?
Initiation. After a petition is filed simultaneously with the
How are AD and CVD investigations conducted?
ITA and the USITC, the ITA generally has 20 days to
Investigations are conducted through an administrative
determine if the petition has enough information and
process (see Figure 1) within specified time limits, which
industry support to initiate an investigation. If the ITA
can be extended under certain conditions. Each phase of an
decides not to initiate, the petition is denied and the
investigation is notified in the Federal Register.
proceedings end.
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Trade Remedies: Antidumping and Countervailing Duties
USITC Preliminary Determination. If the ITA initiates the
order. The ITA determines whether dumping or subsidies
investigation, the USITC investigates whether there is a
would be likely to continue or resume if the order is
“reasonable basis to believe or suspect” that the U.S.
revoked; and the USITC conducts a similar review to
industry has suffered material injury. The USITC normally
determine whether injury to the domestic industry would be
has 45 days from the filing of the petition to make its
likely to continue or resume.
preliminary finding. If affirmative, the investigation
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
Source: UITC as of January 11, 2021.
targeted merchandise has been dumped or subsidized. In
Issues for Congress
CVD investigations, the final determination must generally
be made within 75 days of the ITA preliminary
Enforcement. Some in Congress assert that CBP
determination; in AD cases, 75-135 days after the
ineffectively enforces AD/CVD orders by not promptly
preliminary determination. If affirmative, the investigation
investigating duty circumvention allegations and under-
continues to the final stage at the USITC. If negative, the
collecting duties. P.L. 114-125, the Trade Facilitation and
investigation is terminated.
Trade Enforcement Act of 2015, in part, required that CBP:
(1) investigate AD/CVD duty evasion based on a time line;
USITC Final Determination. The investigation concludes at
(2) more efficiently collect and verify data on importers;
the USITC for the final injury phase. The Commission has
and (3) base importer’s bond amounts on risk. Executive
45-75 days to make its final determination. If negative, the
Order 13785 (March 31, 2017) required risk assessments
investigation ends. If affirmative, the ITA issues an AD or
for bonds, and strengthened bond requirements for new
CVD order.
importers of goods subject to AD/CVD duties and those
who have not paid AD/CVD duties on time. In fiscal years
AD or CVD Order Issued. The ITA issues an AD or CVD
2017 and 2018, CBP reported that these new tools had
order instructing CBP to collect cash deposits for estimated
helped prevent the evasion of more than $50 million in
duties owed on all entries of the targeted merchandise.
AD/CVD duties annually.
Reviews
WTO Rules and Disputes. AD/CVD actions are subject to
Are AD and CVD orders permanent? No. Orders are
WTO dispute settlement, and the United States has acted as
subject to several types of review, which could result in the
both complainant and respondent in WTO disputes. The
WTO Appellate Body’s (AB) rulings on U.S. AD/CVD
dumping or subsidy margin being adjusted up or down. A
review could also lead to continuation or revocation of an
actions have been the source of some of the strongest U.S.
AD or CVD order.
criticism of the AB.
What is an administrative review? Each year, during the
Potential Member Involvement. The quasi-judicial
anniversary month of the publication of an AD or CVD
investigative process in U.S. law may indicate that
order, an interested party may request that the ITA conduct
Congress intended AD/CVD actions to be conducted apart
a review of an order to determine the actual amount of AD
from political influence. However, AD/CVD investigations
or CVD duties to be paid on the entries.
also involve constituents—either U.S. petitioning
companies, or U.S. importing companies possibly harmed
What is a changed circumstances review? Interested
by trade remedy actions. Thus, Members are sometimes
parties may also request that the ITA review an AD or CVD
asked to write letters or testify at hearings on either side of
order if they have questions about whether an order still
a trade remedy action to support a constituent’s cause.
applies; for example, if the U.S. industry is no longer
interested in covering certain products, or if the business
Vivian C. Jones, Specialist in International Trade and
structure of the foreign manufacturer has changed.
Finance
Christopher A. Casey, Analyst in International Trade and
What is a “sunset” review? No later than once every five
Finance
years, the ITA and USITC must review each AD or CVD
IF10018
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Trade Remedies: Antidumping and Countervailing Duties
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https://crsreports.congress.gov | IF10018 · VERSION 6 · UPDATED