What are the differences between antidumping and countervailing duties? Under what conditions are these duties imposed?

Question

What will be an ideal response?

Answer 1

Dumping essentially refers to the sale of merchandise in export markets at unfair prices. In order to offset the impact of dumping and to penalize guilty companies, most countries have introduced legislation providing for the imposition of antidumping duties. These duties are levied if injury is caused to domestic producers. Such duties are normally imposed as special additional import charges equal to the dumping margin. They are almost invariably applied to products that are also manufactured or grown in the importing country. In the United States, antidumping duties are assessed after the commerce department finds a foreign company guilty of dumping and the International Trade Commission rules if the dumped products injured American companies. Countervailing duties, on the other hand, are additional duties levied to offset subsidies granted in the exporting country. In the United States, countervailing duty legislation and procedures are very similar to those pertaining to dumping. The U.S. Commerce Department and the International Trade Commission jointly administer both the countervailing duty and antidumping laws.