The U.S. trade policy is based on combating unfairly traded imports. There are regulations in place to provide relief to domestic producers that are adversely affected by imports that benefit from government subsidies in home countries or are dumped at low prices in the US market.
Antidumping and Countervailing Duties
Antidumping (AD) and countervailing (CVD) duties are additional duties that may be assessed on imported goods intended for sale in the United States at abnormally low prices. These low prices are the result of unfair foreign trade practices that give some imports an unearned advantage over competing U.S. goods.
Dumping is the practice of trying to sell products in the United States at lower prices than those same products would bring in the producer’s home market. Dumping also includes trying to sell a product in the United States at a price lower than it cost to manufacture that item.
Subsidizing is the practice by some governments of providing financial assistance to reduce manufacturers’ costs in producing, manufacturing or exporting particular commodities. Countervailing duties may be assessed to “level the playing field” between domestic and subsidized imported goods. However, to meet the criteria for assessing antidumping or countervailing duties, the imported merchandise must, in addition to being subsidized or sold at less than fair value, also injure a U.S. industry. (See attachment)