Anti-Dumping Duty

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Definition of 'Anti-Dumping Duty'

An anti-dumping duty is a type of tariff imposed on imports of a product from a foreign country that is sold at a price below its normal value. The purpose of an anti-dumping duty is to offset the unfair advantage that the foreign producer has by selling its product at a lower price than it does in its home market.

Anti-dumping duties are typically imposed by governments when they determine that a foreign producer is dumping its product in their country. Dumping occurs when a foreign producer sells its product in a foreign market at a price below its normal value. The normal value is the price at which the product is sold in the producer's home market or in a third country market.

Anti-dumping duties are designed to prevent foreign producers from unfairly undercutting the prices of domestic producers and to protect domestic jobs. However, anti-dumping duties can also have negative consequences, such as increasing the cost of goods for consumers and harming trade relations between countries.

The World Trade Organization (WTO) has rules that govern the imposition of anti-dumping duties. These rules are designed to ensure that anti-dumping duties are only imposed when dumping is actually occurring and that the duties are not used as a form of protectionism.

The WTO also has a dispute settlement mechanism that can be used by countries that believe that they are being unfairly targeted by anti-dumping duties.

In the United States, anti-dumping duties are imposed by the U.S. Department of Commerce. The Commerce Department conducts an investigation to determine whether dumping is occurring and, if so, to calculate the amount of the anti-dumping duty that should be imposed. The Commerce Department's decision is then reviewed by the U.S. International Trade Commission (ITC). The ITC determines whether the anti-dumping duty is necessary to protect the U.S. industry from injury.

If the ITC finds that the anti-dumping duty is necessary, the duty is imposed on imports of the product from the foreign country. The anti-dumping duty remains in effect until the Commerce Department determines that dumping is no longer occurring or until the ITC finds that the duty is no longer necessary to protect the U.S. industry.

Anti-dumping duties are a complex and controversial issue. There are strong arguments both for and against the use of anti-dumping duties. However, it is important to remember that anti-dumping duties are only one tool that governments can use to protect their domestic industries from unfair trade practices.

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