Trade remedies can dramatically increase import costs. This guide explains anti-dumping mechanisms, countervailing duties, and safeguards, with focus on the United States and Mexico, including mitigation strategies for importers.
Trade remedies are legal instruments that governments use to protect domestic industries against unfair trade practices or against sudden increases in imports that cause injury to domestic production. They are permitted by the World Trade Organization (WTO) and are fundamental tools of the international trading system.
There are three main types of trade remedies: anti-dumping duties (against sales below normal value), countervailing duties or CVD (against government subsidies), and safeguards (against sudden surges in imports). Each has different legal requirements, distinct investigation processes, and varying effects on import operations.
For importers, these measures represent significant additional costs that can completely alter the economic viability of a trade operation. An anti-dumping duty can add 10% to 400% or more to the import cost, turning a competitive product into an economically unviable one overnight.
As of 2025, there are over 500 active anti-dumping and countervailing duty orders in the United States, covering products from steel and aluminum to honey, shrimp, and wooden furniture. Verifying whether your product is subject to these orders is a critical step BEFORE importing.
An anti-dumping investigation is initiated when a domestic industry (or the government sua sponte) files a petition arguing that foreign producers are selling their products in the domestic market at prices below their 'normal value' (generally the price in the home market or cost of production) and that these imports are causing material injury to the domestic industry.
In the US, anti-dumping investigations involve two agencies: the Department of Commerce (DOC) determines whether dumping exists and calculates the dumping margin, while the International Trade Commission (ITC) determines whether imports are causing material injury to the domestic industry. Both determinations must be affirmative for duties to be imposed.
Participation in an anti-dumping investigation is crucial. Foreign producers/exporters and importers who do not participate receive the highest calculated margin (or an 'adverse' margin based on adverse facts available). Participating allows presentation of pricing and cost information that can result in a lower or even zero dumping margin.
The 'all others' margin (for companies that do not participate) can be dramatically higher than individual margins. In recent cases involving Chinese steel, individual margins were 30-60% while the 'all others' margin exceeded 200%. Active participation in the investigation can save millions of dollars.
Countervailing duties (CVD) are imposed to offset the effect of government subsidies that give foreign producers an unfair advantage. Unlike dumping (a company's conduct), CVDs target actions by the exporting country's government: preferential-rate loans, tax exemptions, provision of inputs below market price, etc.
The investigation process is similar to anti-dumping, with DOC determining the existence and magnitude of the subsidy, and the ITC determining injury. A unique aspect of CVD investigations is that DOC directly investigates the foreign government's programs, which can create diplomatic tensions.
It is common for anti-dumping and countervailing duty investigations to be initiated simultaneously on the same product and country. This is known as 'dual filing' and can result in imposition of both types of duties, multiplying the impact on import costs. For example, certain Chinese steel products face AD duties of 60% PLUS CVD of 40%, adding a combined 100% on top of the normal tariff.
The US classifies China as a 'non-market economy' (NME). This has enormous implications in AD investigations: instead of using Chinese prices to calculate normal value, DOC uses prices from a surrogate country (such as India or Thailand). This frequently results in higher dumping margins.
Safeguards are temporary measures that a country can impose when a sudden increase in imports of a product causes or threatens to cause serious injury to the domestic industry. Unlike anti-dumping and CVD, safeguards do not require proving unfair practices; it is sufficient to demonstrate injury caused by the volume of imports.
In the US, safeguards are investigated under Section 201 of the Trade Act of 1974. The ITC determines whether serious injury exists and recommends measures to the President, who has discretion to accept, modify, or reject the recommendations. The most recent and significant safeguards were those imposed by the Trump administration in 2018 on solar panels and washing machines.
Safeguards are less common than AD/CVD orders because they have a higher burden of proof ('serious' vs 'material' injury) and carry trade compensation obligations. However, when imposed, they tend to be broader in scope because they apply to imports from all origins, not just specific countries.
The tariffs on steel (25%) and aluminum (10%) imposed under Section 232 of the Trade Expansion Act are technically national security measures, not trade safeguards. However, their effect on imports is similar. These measures have been in effect since 2018 and have been internationally controversial.
In Mexico, trade remedies are called 'cuotas compensatorias' (countervailing duties) and are regulated by the Foreign Trade Law and its Regulations. The investigating authority is the International Trade Practices Unit (UPCI) of the Ministry of Economy. The process is similar to the US system but with different terminology and timelines.
Mexico currently has more than 40 active countervailing duties, primarily against products from China (steel, textiles, footwear, chemical products) and some from other countries. Duties are reviewed every five years (sunset review) to determine whether they should be maintained, modified, or eliminated.
An important aspect of the Mexican system is the possibility of obtaining an 'individual countervailing duty' for a specific exporter who demonstrates they are not practicing dumping. This allows certain suppliers to export to Mexico with a reduced or even 0% duty, while other exporters from the same country face the general rate.
Before importing any product into Mexico, verify whether it is subject to countervailing duties by checking resolutions published in the DOF or asking your customs broker. Importing without paying applicable countervailing duties is a serious offense that can result in seizure of goods and significant fines.
Trade remedies impact import operations across multiple dimensions: direct cost increase (duties are paid in addition to the normal tariff), additional documentation requirements, deposits or bonds, and supply chain complications. The importer must be prepared to manage these impacts proactively.
In the United States, the liquidation process can be particularly complex. The importer pays an estimated cash deposit at the time of import, but the final rate is determined in the annual administrative review, which may conclude 2-3 years later. If the final rate is higher than the deposit, the importer must pay the difference with interest. If lower, they receive a refund.
When calculating the total import cost of a product subject to AD/CVD, consider not only the current rate but also the risk that the rate may increase in future reviews. Reserve a contingency margin of 20-30% above the current rate to protect against unexpected increases.
Importers should also consider the risk of new investigations. Even if your product or country of origin is not currently subject to AD/CVD orders, this can change if the domestic industry files a new petition. Monitoring petitions published by DOC and ITC is a recommended risk management practice.
Importers are not defenseless against trade remedies. Multiple legal strategies exist to mitigate their impact, from diversifying supply sources to active participation in investigations. The key is to act proactively, not reactively.
Supplier diversification is the most direct strategy. If your Chinese supplier faces 100% AD duties, suppliers in Vietnam, India, or Mexico may offer viable alternatives. However, be careful of transshipment: relabeling Chinese products as Vietnamese or Indian is illegal and can result in criminal penalties.
Evasion of AD/CVD orders (transshipment, misclassification, undervaluation) is aggressively investigated by CBP and can result in civil penalties of up to 4 times the value of the goods, and in serious cases, criminal prosecution with prison sentences.
For companies with significant volume of affected imports, hiring a trade remedies attorney is an investment that pays for itself. A good attorney can guide you through investigation participation, request administrative reviews, and design compliance strategies that minimize your legal and financial exposure.
The global trade remedies landscape is evolving rapidly, driven by geopolitical tensions, the energy transition, and supply chain repositioning. Importers must stay alert to these trends to anticipate risks and opportunities in their trade operations.
The most significant trend is the expansion of trade remedies beyond their traditional scope (heavy manufacturing) into high-tech and clean energy sectors. Investigations into Chinese electric vehicles, solar panels, and lithium batteries reflect the intersection of trade policy, industrial policy, and geopolitical competition.
The European Carbon Border Adjustment Mechanism (CBAM), which will be fully operational in 2026, represents a new type of border measure that will tax imports based on their carbon footprint. While not technically a trade remedy, its effect is similar: it increases the import cost of products from countries with lower environmental standards.
“International trade has never been truly 'free.' Trade remedies are the safety valve that allows countries to participate in the open trading system while protecting their industries from unfair practices. The key is to use these tools in a fair, transparent, and proportional manner.”
— World Trade Organization — Annual Report on Anti-Dumping Measures
Camtom actively monitors trade remedy investigations in the US and Mexico that may affect our users. Subscribe to our trade alerts to receive notifications when new investigations relevant to your products are initiated.
Camtom Team
Editorial Team
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