Antidumping and Countervailing Duties Explained for US Importers

What Are Antidumping and Countervailing Duties?

Antidumping (AD) and countervailing (CVD) duties are additional tariffs imposed by the US government to offset unfair trade practices by foreign producers and governments. Antidumping duties address dumping, which occurs when a foreign manufacturer sells goods in the US market at a price below the normal value in its home market or below the cost of production. Countervailing duties address subsidies provided by foreign governments to their domestic producers, which give those producers an unfair competitive advantage in the US market.

These duties are administered by two agencies: the US Department of Commerce (DOC), which investigates whether dumping or subsidization is occurring and calculates the duty rates, and the US International Trade Commission (ITC), which determines whether the US domestic industry has been materially injured or threatened with injury by the unfairly traded imports. Both findings are required before AD/CVD orders can be imposed.

How AD/CVD Cases Are Initiated

AD/CVD cases typically begin when a US domestic industry or trade association files a petition with both the DOC and the ITC. The petition must contain evidence of dumping or subsidization and evidence of material injury to the domestic industry. The DOC and ITC then conduct parallel investigations. The DOC investigation focuses on calculating dumping margins or subsidy rates for specific foreign producers and exporters. The ITC investigation examines the condition of the US industry, the volume and price effects of the imports, and the causal link between the imports and the injury.

1. Petition filed by US domestic industry with DOC and ITC
2. ITC makes preliminary injury determination (within 45 days)
3. DOC makes preliminary determination of dumping/subsidization (within 140-190 days)
4. If preliminary AD/CVD rates are set, importers must post cash deposits or bonds
5. DOC makes final determination of dumping/subsidization
6. ITC makes final injury determination
7. If both findings are affirmative, AD/CVD order is published
8. Annual administrative reviews adjust duty rates for specific producers

Understanding AD/CVD Duty Rates

AD/CVD duty rates are not uniform. The DOC calculates individual rates for cooperating foreign producers based on their actual sales data and cost information. Producers who cooperate fully with the investigation typically receive the lowest rates. Producers who do not cooperate, or who are not individually examined, receive an all-others rate based on the weighted average of the individually calculated rates. In cases involving non-market economies like China, the DOC uses surrogate country data to calculate normal values, which often results in very high duty rates.

The Retrospective Assessment System

Unlike regular customs duties, which are final at the time of entry, AD/CVD duties in the US operate on a retrospective system. When goods enter the country, importers pay estimated duties based on the most recent published rate. However, the actual duty rate is not finalized until the DOC conducts an annual administrative review covering the specific period of entry. These reviews can take 12 to 18 months to complete, meaning importers may face additional duty assessments or receive refunds years after the original importation. This uncertainty creates significant financial planning challenges.

Scope and Circumvention: Expanding the Net

One of the most complex aspects of AD/CVD law is the question of scope: which products are covered by an existing AD/CVD order? The DOC regularly conducts scope inquiries to determine whether specific products fall within the scope of an order. Additionally, the DOC investigates circumvention, which occurs when producers try to evade AD/CVD duties by slightly modifying a product, shipping through a third country, or assembling the product in the US or a third country from components produced in the subject country. Recent circumvention investigations in the solar panel industry, where Chinese producers were found to be routing production through Southeast Asian countries, have resulted in expanded duty coverage.

The EAPA Process

The Enforce and Protect Act (EAPA) created a separate process for investigating AD/CVD evasion through transshipment and other schemes. Under EAPA, CBP can investigate allegations of evasion and impose interim measures, including suspension of liquidation and increased bonding requirements, within 90 days of initiating an investigation. This has become a powerful enforcement tool, particularly for products from China that are transshipped through countries like Vietnam, Thailand, and Malaysia.

Risk Management Strategies for Importers

Managing AD/CVD risk begins with awareness. Importers should regularly check the DOC's AD/CVD orders and reviews database to determine whether any of their products are covered by existing orders. When sourcing from countries or in product categories where AD/CVD orders exist, importers should request documentation from suppliers regarding their specific AD/CVD rate and whether they have been individually examined. Diversifying suppliers across multiple countries can reduce exposure, but importers must be careful to avoid circumvention issues.

Current AD/CVD Trends

The number of active AD/CVD orders has grown steadily, with over 600 orders in effect as of early 2026. Key sectors with extensive AD/CVD coverage include steel and aluminum products (over 150 orders), chemicals, agricultural products, and manufactured goods. China remains the country most frequently subject to AD/CVD orders, followed by India, South Korea, and various other countries. The trend toward increasing use of trade remedies shows no sign of slowing, making AD/CVD awareness an essential component of any importer's compliance program.