Understanding AD/CVD Duties
Anti-dumping (AD) and countervailing duties (CVD) are trade remedies that protect US industries from unfair foreign pricing and subsidies. Unlike regular tariffs, AD/CVD rates can exceed 100% and apply retroactively, creating major risk for unprepared importers.
What Triggers AD/CVD?
Anti-Dumping Duties
- Foreign producer sells in US below "normal value"
- Normal value = home market price or cost plus profit
- Must cause material injury to US industry
- Investigated by Commerce and ITC jointly
Countervailing Duties
- Foreign government subsidizes production
- Subsidy provides specific benefit to exporter
- Must cause material injury to US industry
- Often applied alongside AD duties
The Investigation Process
- Petition filed by domestic industry
- Commerce initiates within 20 days
- ITC preliminary injury determination (45 days)
- Commerce preliminary determination (140 days)
- Cash deposits required upon preliminary finding
- Final determinations and order issuance
- Annual administrative reviews adjust rates
Cash Deposits and Assessment
- Deposit required at entry based on preliminary rate
- Final duty assessed years later after administrative review
- Importer of record liable for difference
- Rates can go UP or DOWN from initial deposit
- Continuous bond coverage required
How to Check for AD/CVD Orders
- Search Commerce's ACCESS database
- Check CBP's ADD/CVD search portal
- Review HTS code against current orders
- Verify country of origin and producer
- Request scope ruling if uncertain
Major Product Categories Under Orders
- Steel products (many countries)
- Solar cells and panels
- Wooden cabinets and vanities
- Chemicals and plastics
- Aluminum extrusions
- Tires and automotive parts
- Furniture and mattresses
Evasion Risks
Transshipment to avoid AD/CVD is illegal and aggressively prosecuted. Enforce and Protect Act (EAPA) investigations result in:
- Retroactive duties on prior entries
- Civil penalties up to domestic value
- Criminal prosecution in severe cases
- Seizure of merchandise
Best Practices
- Conduct AD/CVD scope screening before importing new products
- Obtain scope rulings for borderline classifications
- Document supply chain back to raw materials
- Maintain mill certs and country of origin evidence
- Budget for potential duty increases in administrative reviews
- Work with experienced trade attorneys for high-risk imports
Company-Specific Rates
AD/CVD rates often vary by manufacturer. "All others" rate applies if no company-specific rate exists. Identifying the correct producer and verifying eligibility for lower rates can significantly reduce duty exposure.
