

Updated June 21, 2024
Trade Remedies: Antidumping and Countervailing Duties
Overview
can be extended under certain conditions. Each phase of an
What are they? Antidumping (AD) and Countervailing
investigation is notified in the Federal Register.
Duties (CVD) address unfair trade practices by providing
relief to U.S. industries and workers that are “materially
What is the role of the International Trade
injured,” or threatened with injury, due to imports of like
Commission? The USITC determines whether a U.S.
products sold in the U.S. market at less than fair value
industry “is materially injured, or is threatened with
(AD), or subsidized by a foreign government or public
material injury, or the establishment of an industry in the
entity (CVD).
United States is materially retarded,” due to sales of the
targeted merchandise in the U.S. market.
What is the relief provided? At the end of an investigative
process, in AD cases, the remedy is an additional duty
What is the role of the International Trade
placed on the imported merchandise to offset the difference
Administration? The ITA is the “administering authority”
between the price (or cost) in the foreign market and the
in the statute. The ITA evaluates the petition, decides
price in the U.S. market. In CVD cases, a duty equivalent to
whether to initiate an investigation, determines whether
the amount of subsidy is placed on the imports.
dumping or subsidies exist, and calculates the amount of
dumping (dumping margin) or subsidy. If an investigation
Who conducts AD and CVD investigations? The U.S.
results in final affirmative determinations by both the ITA
International Trade Commission (USITC) determines if a
and the USITC, the ITA issues an AD or CVD order
U.S. industry has suffered material injury. The International
directing U.S. Customs and Border Protection to collect
Trade Administration of the Department of Commerce
duties on the imported merchandise.
(ITA) determines the existence and amount of dumping or
subsidy.
Figure 1. Overview of AD/CVD Investigations
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 FY2020, $18.2 billion of imported goods
were subject to AD/CVD and U.S. Customs and Border
Protection (CBP) assessed approximately $1.8 billion in
AD/CVD deposits and levied more than $31 million in
fines and penalties for fraud, negligence, and gross
negligence of AD/CVD requirements.
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?
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
industry support to initiate an investigation. If the ITA
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Trade Remedies: Antidumping and Countervailing Duties
decides not to initiate, the petition is denied and the
What is a “sunset” review? No later than once every five
proceedings end.
years, the ITA and USITC must review each AD or CVD
order. The ITA determines whether dumping or subsidies
USITC Preliminary Determination. If the ITA initiates the
would be likely to continue or resume if the order is
investigation, the USITC investigates whether there is a
revoked; and the USITC conducts a similar review to
“reasonable basis to believe or suspect” that the U.S.
determine whether injury to the domestic industry would be
industry has suffered material injury. The USITC normally
likely to continue or resume.
has 45 days from the filing of the petition to make its
preliminary finding. If affirmative, the investigation
Figure 2. U.S. AD/CVD Orders In Force by Country
continues at the ITA. If negative, the investigation ends.
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.
Source: ITA as of June 21, 2024.
ITA Final Determination. Following the preliminary phase,
Issues for Congress
the ITA continues its investigation to determine whether the
targeted merchandise has been dumped or subsidized. In
Enforcement. Some in Congress assert that CBP
ineffectively enforces AD/CVD orders by not promptly
CVD investigations, the final determination must generally
be made within 75 days of the ITA preliminary
investigating duty circumvention allegations and under-
determination; in AD cases, 75-135 days after the
collecting duties. P.L. 114-125, the Trade Facilitation and
Trade Enforcement Act of 2015, in part, required that CBP:
preliminary determination. If affirmative, the investigation
continues to the final stage at the USITC. If negative, the
(1) investigate AD/CV duty evasion based on a time line;
investigation is terminated.
(2) more efficiently collect and verify data on importers;
and (3) base importer’s bond amounts on risk. Executive
USITC Final Determination. The investigation concludes at
Order 13785 (March 31, 2017) required risk assessments
the USITC for the final injury phase. The commission has
for bonds, and strengthened bond requirements for new
importers of goods subject to AD/CVD and those who have
45-75 days to make its final determination. If negative, the
investigation ends. If affirmative, the ITA issues an AD or
not paid AD/CVD on time. CBP has stated these new tools
CVD order.
have helped prevent evasion.
AD or CVD Order Issued. The ITA issues an AD or CVD
WTO Rules and Disputes. AD/CVD actions are subject to
order instructing CBP to collect cash deposits for estimated
WTO dispute settlement, and the United States has acted as
duties owed on all entries of the targeted merchandise.
both complainant and respondent in WTO disputes. The
WTO Appellate Body’s (AB) rulings on AD/CVD actions
Reviews
have been the source of some of the strongest U.S. criticism
of the AB. The WTO agreements addressing AD/CVD have
Are AD and CVD orders permanent? No. Orders are
subject to several types of review, which could result in the
not been updated since 1994. The United States, Japan, and
dumping or subsidy margin being adjusted up or down. A
the European Union have expressed a desire to update the
agreements address challenges posed by non-market
review could also lead to continuation or revocation of an
economies, particularly with respect to subsidies.
AD or CVD order.
Potential Member Involvement. The quasi-judicial
What is an administrative review? Each year, during the
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
from political influence. However, AD/CVD investigations
a review of an order to determine the actual amount of AD
or CVD duties to be paid on the entries.
also involve constituents—either U.S. petitioning
companies, or U.S. importing companies possibly harmed
by trade remedy actions. Thus, Members are sometimes
What is a changed circumstances review? Interested
parties may also request that the ITA review an AD or CVD
asked to write letters or testify at hearings on either side of
a trade remedy action to support a constituent’s cause.
order if they have questions about whether an order still
applies; for example, if the U.S. industry is no longer
interested in covering certain products, or if the business
Christopher A. Casey, Analyst in International Trade and
structure of the foreign manufacturer has changed.
Finance
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Trade Remedies: Antidumping and Countervailing Duties
IF10018
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