Anti-dumping duties are tariffs imposed by a country’s government on imported goods that are being sold at prices lower than their fair market value. Dumping occurs when a foreign company sells its products in another country at prices lower than what it charges in its domestic market or below the cost of production. This can harm domestic industries by undercutting their prices and creating unfair competition.
Anti-dumping duties are designed to protect domestic industries from such unfair trade practices. The duties are intended to offset the price advantage enjoyed by the dumped imports and bring their prices closer to a fair market value. By imposing additional tariffs on the dumped goods, the government aims to discourage imports at artificially low prices and create a level playing field for domestic producers.
The imposition of anti-dumping duties typically involves an investigation by the importing country’s government or a designated authority. The investigation determines whether dumping has occurred, calculates the margin of dumping (the price difference between the fair market value and the import price), and assesses the injury caused to the domestic industry. If the investigation concludes that dumping has indeed taken place and is causing material injury to the domestic industry, anti-dumping duties may be imposed on the specific imported products involved.
Anti-dumping duties are meant to be temporary measures and are usually imposed for a specific period, such as five years. However, they can be extended if the domestic industry continues to face injury from the dumped imports. The rates of anti-dumping duties can vary depending on the margin of dumping found during the investigation.
It’s important to note that anti-dumping measures should comply with the rules and regulations set by the World Trade Organization (WTO) to ensure they are not used as a form of protectionism but rather as a legitimate tool to address unfair trade practices. WTO members must follow specific procedures and guidelines when imposing anti-dumping duties to maintain fairness in international trade.
At Connected Sourcing we are able to assist our clients in understanding the impact of ADD on their products. Speak with us today to understand how ADD will affect your business.
