Countervailing Duties (CVDs)

Countervailing duties (CVDs) are additional taxes imposed on imported goods that have been subsidized by their government, or given financial assistance to increase production while keeping operating costs low. The purpose of CVDs is to offset the unfair advantage that subsidized imports have over domestically made goods. 

CVDs are imposed by the importing country’s government after an investigation has determined that the imported goods are being subsidized. This causes the price of the imported item to be significantly less than a similar domestic counterpart. 

The investigation considers the following factors: 

• the amount of the subsidy, 
• the impact of the subsidy on the domestic industry, 
• and whether the subsidy is causing injury to the domestic industry.

If the investigation finds that the imported goods are being subsidized, the importing country’s government will impose a CVD on the goods. The amount of the CVD will be equal to the amount of the subsidy.

Related articles:

Antidumping and Countervailing Duties: Balancing World Trade 

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