Countervailing Duty

Countervailing Duty is a special tariff imposed by an importing country on foreign goods that have received subsidies from the exporting country's government, aimed at offsetting the unfair price advantage brought by subsidies and protecting domestic industries. Application scenarios: When an importing country determines through investigation that a certain product has benefited from subsidies provided by the exporting country's government, such as financial assistance, tax reductions, or low-interest loans, and has caused material injury or threat to domestic industries, a countervailing duty may be imposed. Precautions: Countervailing duties must comply with the WTO Agreement on Subsidies and Countervailing Measures and must go through procedures such as case filing, investigation, preliminary ruling, and final ruling; the amount of duty imposed usually does not exceed the amount of subsidy; unlike anti-dumping duties, countervailing duties target government subsidy practices, while anti-dumping duties target low-price dumping practices by enterprises. The two can be imposed simultaneously, but duplicate calculation of the same subsidy benefit must be avoided. Foreign trade practitioners should pay attention to the compliance of the exporting country's subsidy policies and actively respond to investigations when encountered.