What is an example of a countervailing duty?
Asked by: Dr. Lloyd Botsford III | Last update: July 24, 2025Score: 4.6/5 (32 votes)
For example, if Nation A provides large exploration and production subsidies to oil and gas firms, Nation B may impose a countervailing duty on oil and gas from Nation A to put its domestic oil and gas producers on an equal footing with its foreign competitors.
What is the purpose of the countervailing duty?
How Countervailing Duties (CVDs) Work. CVDs are special measures meant to neutralize the negative effects that subsidies of the production of a good in one country have on that same industry in another country, in which the production of that good is not subsidized.
Who is the largest user of countervailing duties?
1 7 Moreover, the United States has been the only major trading nation to use counter- vailing duties extensively. ' 8 With very few exceptions, other importing countries do not impose countervailing duties on the subsidized prod- ucts that become subject to countervailing duties in the United States.
What is the difference between anti-dumping and countervailing duties?
Dumping occurs when foreign manufacturers sell goods in the U.S. at less than fair value. Countervailing cases are when a foreign government provides enough subsidies and tax benefits for their manufacturers to sell their goods more cheaply than U.S. manufacturers.
What is the countervailing duty of CVD?
Countervailing duty (CVD) is a specific form of duty that the government imposes in order to protect domestic producers by countering the negative impact of import subsidies. CVD is thus an import tax by the importing country on imported products.
What Are Antidumping and Countervailing Duties?
What is a simple example of countervailing duty?
For example, if Nation A provides large exploration and production subsidies to oil and gas firms, Nation B may impose a countervailing duty on oil and gas from Nation A to put its domestic oil and gas producers on an equal footing with its foreign competitors.
What is countervailing in simple terms?
To countervail is to oppose something successfully. To countervail is to counteract, counterbalance, or neutralize. This verb is best known to us in the form of its participle countervailing, which gets far more time in the limelight as an adjective than countervail gets as a verb.
What is the countervailing duty in customs?
Countervailing duties, also known as anti-subsidy duties, are import duties imposed under World Trade Organization (WTO) rules and aimed to neutralise the negative effects of subsidies.
What is an example of anti-dumping duty?
Anti-Dumping Duty Example
For instance, China produces mobile phones and sells them in its local market for an amount which is equivalent to INR 15,000. However, the same product is sold at a lower price by that Chinese brand when it is exported to India or some other country.
What are anti countervailing duties?
Anti-Dumping and Countervailing Duties are extra import duties imposed on goods in addition to the normal duties that apply. These duties apply to imported goods that are sold in the European Union (EU) at prices substantially lower than their normal value.
What are the benefits of countervailing duties?
Importance of countervailing duties
As competitors obtain a subsidy to export goods, domestic producers selling the same products may get adversely impacted. CVD ensures that domestic producers are not put at a disadvantage because of foreign subsidies on imported goods.
What is CVD calculated on?
Additional Customs Duty (CVD)
This duty is calculated on a value base of aggregate of value of the goods including landing charges and basic customs duty. Other duties such as anti-dumping duty, safeguard duty, additional customs duty of 4% etc. are not taken into account.
What is the reason for countervailing?
Antidumping and countervailing duties are intended to offset the value of dumping and/or subsidization, thereby leveling the playing field for domestic industries injured by such unfairly traded imports.
What are two characteristics of countervailing duties?
What are two characteristics of countervailing duties? They can be substantial and stay in place for 5 years. They are a special tariff.
Who imposes countervailing duty?
Who Imposes Countervailing Measures in India? Directorate General of Trade Remedies (DGTR) under Ministry of Commerce & Industry, is the single national authority for administering all trade remedial measures including anti-dumping, countervailing duties and safeguard measures.
What is the countervailing duties act?
Republic Act No. 8751, otherwise known as the “Countervailing Duty Act of 1999” (the “Act”), provides protection to a Philippine domestic industry which is being materially injured, or is likely to be materially injured by the subsidization of articles imported into or sold in the Philippines.
How to calculate countervailing duty?
- Assessable value.
- Potential damage to a domestic industry.
- Margin of dumping.
- Rate of subsidization.
Who pays the anti-dumping duty?
Only the official “importer of record” is required to pay the dumping duty. Brokers or other parties to a contract may seek to renegotiate the terms of the contract to take into account the duties. This is a matter of price negotiation and contract renegotiation, but it is not required under the antidumping law.
Why is dumping bad?
This could be because countries unfairly subsidise products or companies have overproduced and are now selling the products at reduced prices in other markets. Why is it a bad thing? Dumping is a form of unfair competition as products are being sold at a price that does not accurately reflects their cost.
What is the difference between countervailing duty and dumping duty?
An anti-dumping measure is an additional duty on dumped imports that have injured Australian industry. A countervailing measure is an additional duty on subsidised imports that have injured Australian industry. These measures (duties) are imposed by the minister on the recommendation of the commissioner.
What is the difference between countervailing duty and safeguard duty?
A countervailing duty can be imposed if a country has subsidised its exports. A product may be subject to both an anti-dumping duty and a countervailing duty. A safeguard duty or a quota can be imposed if unexpectedly increasing imports pose a threat to EU industries.
What is absorption of countervailing duty?
Explanation.For the purposes of this sub-section, "obsorption of countervailing duty" is said to have taken place, (a) if there is a decrease in the export price of an article without any commensurate change in the resale price in India of such article imported from the exporting country or territory; or.
What are countervailing duties?
Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization (WTO). They are applied following an investigation that determines a foreign country's subsidies on exports have harmed domestic producers in the importing country.
What is a synonym for countervailing?
balance counteract counterbalance counterpoise invalidate neutralize nullify undo.
What is a countervailing effect?
Countervailing power, or countervailance, is the idea in political theory that the wielding of power by two or more groups, centers, or sets of interests within a polity can, and often does, yield beneficial effects through productive opposition and containment between opposing forces.