Antidumping and countervailing duties (AD/CVD) are customs charges aimed at counteracting artificially low prices on foreign goods by eliminating unfair price advantages.
Antidumping duties combat the practice of dumping – when imported goods are priced so low as to intentionally lose money and out-compete domestically produced goods.
Countervailing duties are levied on imported goods that are underpriced as a result of government subsidies provided by the country of origin on those goods.
Both these duties can be substantial, often well over 100% and potentially exceeding 400% of the value of the merchandise.
Which products are likely to have AD/CVD levied on them?
The commodities that are most often subject to AD/CVD orders include:
- iron & steel;
- miscellaneous manufactured products;
- chemicals & pharmaceuticals;
- metals & minerals; and
- agricultural, forest and processed food products.
As part of the U.S. Trade Facilitation and Trade Enforcement Act, U.S. Customs and Border Protection (CBP) has increased enforcement of trade non-compliance, including circumvention of duties.
As of June 2018, CBP was enforcing 445 AD/CVD orders on approximately 150 commodities from 46 countries. China is the subject of the greatest number of orders by far, while India, Taiwan, Korea and Japan round out the top five. The top commodity groups impacted by AD/CVD orders include, Iron/Steel Mill, Miscellaneous, Chemicals, Iron/Steel Pipe, and Iron/Steel Other.
CBP continues to maintain vigilance and enforcement in this area going forward.
What can I do to make sure I don’t get hit with high duties?
If you import into the U.S. and haven’t done a review of your goods for likelihood of enforcement targeting, you would be well advised to do so immediately. The following steps are advised in order to minimize your risk:
- Conduct regular internal reviews to verify the classification and origin of your goods and determine if they fit within the scope of goods covered by AD/CVD orders.
- Self-disclose to CBP any problems those reviews reveal.
- Keep in mind that AD/CVD are country-specific and more likely to apply to some goods than others. Consider sourcing from countries that are not subject to AD/CVD.
No one wants to find themselves on the wrong side of an AD/CVD investigation. An experienced customs broker can take a professional’s eye to your exports and advise you on your obligations for customs compliance, including knowing what to expect with respect to duty obligations.
Email us today to get professional guidance on import and export compliance. For more general information, visit our website.
Information provided by: U.S. Customs Compliance Dept. - Cole International