Countervailing Duties

While the law is extremely complex and practice in the area is changing constantly, the summary below provides a quick reference to the main issues. Because we have one of the largest trade remedies’ practices in the United States, we would be glad to answer any specific questions that you may have on these issues. Call Jeff Neeley or Matt McGrath in the Washington, D.C. office at 202-483-0070 for further information.

1.    How Cases Begin—Cases may be filed by a U.S. industry that can show that (a) imports are subsidized; and (b) the U.S. industry is being injured by these subsidized imports.

2.     Deadlines—Cases have very strict and fast deadlines. The first hearing is three weeks after the filing of a petition. Final determinations are made within one year. Interim relief is generally granted within 160 days of the initial filing.

3.     Agencies involved—Cases are heard at the U.S. Department of Commerce (regarding the level of subsidies) and the U.S. International Trade Commission (regarding whether injury exists).

4. Type of Relief—Relief is in the form of additional duties. U.S. producers that are faced with subsidized imports like these cases because a successful case will effectively offset such subsidies.

5. Risks to Importers—Importers operating under a subsidy order need to be very cautious because the subsidy rates may change and the scope of the order may be modified.

6. What Is A Subsidy?—Subsidies may be such things as export subsidies, special tax zones for exporters, government loans at below market rates, preferential tax benefits for exporters, preferential tax benefits for certain industries, equity infusions in non-equity worthy companies.

7. Retroactive Assessment—Importers deposit duties based on the last completed calculation of rates, but these are only estimates and not final rates. Once each year a review will be conducted for the prior year’s sales to determine what the subsidy margin is for entries during that year.

 For example, a company might deposit 10% subsidy duties for January-December 2011. In January 2012, the DOC begins to review those 2011 sales (review proceeding takes about one year). When a review is completed the actual duties are determined, which can be greater or less than the 10%. Importer gets refund or pays additional duties.

8. ITC Injury Determination—Even if the Commerce Department finds subsidies, the CVD order will not go into effect unless the ITC also finds that the domestic industry is injured by reason of the subsidized imports. 

The essential argument of importers and exporters at the ITC usually is that U.S. industry is not being harmed (or threatened), usually because of a lack of any causal connection between the imports and the condition of the U.S. industry. The substantive argument often is based on an alleged lack of linkage between subsidized imports and condition of the US industry, differences in product segments leading to no real competition, other causes of the problems of the industry. Procedural steps include filing a notice of appearance, completing questionnaires, participating in staff conferences, and filing briefs with legal/factual arguments.

9. The Administrative Review Process—This process only occurs at the Commerce Department.    The retrospective assessment system in the U.S. means that the final liability for subsidies is determined only after the opportunity for a review. The usual time frame for a review is 16-17 months.

Importers may request reviews for their own imported goods. Either domestic parties or foreign manufacturer may request a review for a foreign company.   If a company is to request a review itself, it should prepare in advance and know the risks of such a review, because the CVD paid as a result of the review could be lower, or higher, than the amounts deposited initially.

10. Scope Issues—Only “subject goods” are those that are described in the order.

Sometimes it is possible to “clarify” the order to have imports excluded from the case. If this is done, then the imports are simply not subject to the order.

DOC conducts scope reviews. Any interested party (including an importer) may request a clarification. There is a two tier review process, depending on the case: (1) DOC decides whether the good is clearly outside of scope on face of the order, and (2) if not, then Commerce conducts a further inquiry.

In further inquiry cases, Commerce often examines five factors to assist it in determining if a product is in or out of the scope of the order. The factors are:

  1. Physical characteristics of the product
  2. Expectation of ultimate consumers
  3. Ultimate use of product
  4. Channels of trade of product, and
  5. Manner of advertising and display

 Because BRC is experienced in both customs law and antidumping/CVD practice, it is in a strong position to help clients navigate the complex issues that arise in the scope context.

11. Other Issues—Other issues that arise in CVD cases, which we frequently address, include five year “sunset” reviews determining whether there still would be injury to the U.S. industry if the CVD order were lifted,

12. Circumvention Issues—Circumvention of CVD orders can have administrative effects under the CVD law, as well as penalties from U.S. Customs & Border Protection, and even criminal liability in certain instances. Circumvention issues regarding the CVD order (particularly with regard to Chinese goods) have become increasingly common in recent years. BRC’s expertise with regard to both CBP and the Commerce Department puts us in the position to work through all aspects of the problem for clients and attain a just result.     

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Aug. 20, 2022
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Jul. 18, 2022
Importer Facing 688%(!) AD/CVC Assessments May Not Challenge Assessment
Apr. 27, 2021
Importer Loses CVD Challenge at CIT
Dec. 3, 2020
CIT Pushes Back on EAPA
Oct. 1, 2020
New Petition: Utility Scale Wind Towers from India, Malaysia and Spain
Oct. 1, 2020
New Petition: Aluminum Foil from Armenia, Brazil, Oman, Russia and Turkey
Sep. 1, 2020
WTO: U.S. Wrongly Applied CVD to Softwood Lumber from Canada
Aug. 31, 2020
Commerce Proposes Major Changes to Maximize AD/CVD Enforcement
Aug. 31, 2020
Proposed Changes to New Shipper Reviews, Other AD and CVD Regulations
Aug. 26, 2020
Commerce Rejects Anticircumvention Proceedings to Overcome Negative ITC Injury Determinations
June. 26, 2020
Twist Ties from China Subject of Antidumping and Countervailing Duty Petition
November 28, 2017
Commerce Self-Initiates AD/CVD Investigations of Chinese Aluminum Sheet Imports
August 29
Antidumping/Countervailing Duty Petition Filed Concerning Titanium Sponge
August 16, 2017
AD/CVD Petition on Stainless Steel Flanges from China and India Filed with ITC, DOC
August 10, 2017
Commerce Rules Heat-Treated Aluminum 5050 Extrusions As Circumvention; Overturns Related Scope Rulings
June 14, 2017
Commerce Seeks Public Comment on Draft Sugar Suspension Agreement
June 6, 2017
U.S., Mexico Renegotiate Sugar Suspension Agreement
June 2, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Citric Acid and Certain Citrate Salts from Three Countries
June, 1, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Fine Denier Polyester Staple Fiber form Five Countries
May 18, 2017
President Trump Starts NAFTA Modification Process
May 10, 2017
International Trade Commission Institutes Second and Third Parts of Digital Trade Investigation
April 27, 2017
Antidumping/Countervailing Duty Petition Filed Concerning 100- to 150- Seat Large Civil Aircraft from Canada
April 26, 2017
Bureau of Industry and Security Solicits Public Comments, Announces Public Hearing for Section 232 Steel Investigation
April 25, 2017
Commerce Issues Preliminary Affirmative CVD, Critical Circumstances Determinations for Canadian Softwood Lumber
April 21, 2017
Commerce Department, USTR Solicit Public Comment on Trade Deficit Omnibus Report
April 21, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Certain Tool Chests and Cabinets
April, 21, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Certain Cold-Drawn Mechanical Tubing
April 20, 2017
President Trump Directs Commerce to Expedite National Security Investigation of Steel Imports
March 29, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Carbon and Alloy Steel Wire Rod
March 23, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Biodiesel
March 16, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Chinese Aluminum
March 16, 2017
Antidumping/Countervailing Duty Petition Filed Concerning Silicon Metal
January 19, 2017
Court of International Trade Limits Retroactive Application of Scope Determination
January 19, 2017
Presidential Authority over Trade
January 19, 2017
The National Trade Council
May 4, 2015
Commerce Resumes AD and CVD Case on Sugar for Mexico
Friday April 24, 2015
Senate Finance Committee and House Ways and Means Committee Pass TPA, Customs Reauthorization, and GSP Bills
March 17, 2015
Ruling on Countervailing Duties for Nonmarket Economies
December 10, 2014
Federal Circuit Will Not Rehear GRK Canada Tariff Classification Case
August 19, 2014
China Agrees to Negotiate a Suspension Agreement on Solar Panel Cells
July 15, 2014
WTO Finds U.S. Inconsistent with Obligations in India and China CVD Cases
March 10, 2014
White House Releases 2014 Trade Agenda
December 02, 2013
Manufacturing Company Settles Duty Evasion Suit
October 01, 2013
Government Shutdown Impacts International Trade Agencies
September 17, 2013
CBP Announces the 2013 East Coast Trade Symposium
September 13, 2013
CBP Extends CDSOA Comment Period until October 10