Countervailing Duty
Category: other
A tariff imposed to counteract subsidies provided by a foreign government to its exporters.
Countervailing duties (CVDs) are additional tariffs imposed on imported goods to offset subsidies provided by the exporting country's government to its producers. CVDs are designed to level the playing field between subsidized foreign producers and domestic producers. The US and EU investigate and impose CVDs through trade commission proceedings, often alongside anti-dumping duties.
Examples
- • The US imposes countervailing duties on Chinese aluminum products in addition to anti-dumping duties, to offset Chinese government subsidies to aluminum producers.
- • CVD investigations are conducted by the US International Trade Commission (USITC) and the Department of Commerce (DOC).
- • Sellers importing products subject to CVDs must include these additional duties in their landed cost calculations.