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A guide to countervailing duty and anti-dumping duty

Calculating your import duty and Vat is an essential step when deciding to buy goods from abroad. But have you considered that your duty rate could increase depending on where you are importing your goods from? Countervailing duty and anti-dumping duty are additional levies on goods that are designed to discourage trade with a particular country, or prevent a negative economic impact on the country of import.

Check the tariff when you are deciding to purchase a new commodity from overseas, or when the country of origin has changed.

What is anti-dumping duty?

Anti-dumping duty is levied to prevent “dumping” of cheap goods on the market, which would negatively impact the other producers of those goods from within the territory.

An example of this is electric bicycles from China, which are produced with far lower labour rates than than those inside the EU and U.K.. This allows exported to be able to “dump” them on the market at a much lower rate, which negatively impacts domestic producers and the economy.

Levying anti-dumping duties prevents the  dumping of cheaper goods on the market, but doesn’t block exporters in cheaper countries from selling their goods.

What is countervailing duty?

Countervailing duty is similar to anti-dumping duty, and imposed on goods which have received subsidies in the originating or exporting countries. Because the cost of producing the goods have been offset by the government in the producing or exporting country, they can be sold at a lower rate to other markets, resulting in “dumping”.

Countervailing duty brings the cost of importing the goods closer to the real market rate so that domestic companies are not at a disadvantage. 

What types of anti-dumping duty are there?

The purpose of anti-dumping duty is to bring the cost of importing goods up to match the market value of other imports of the same nature. 
 
This can be achieved in a few ways:
 
– A standard additional duty is levied based on a % of the price of the goods.
 
– A minimum price-per-quantity is set, with duties levied to bring the cost to that level.
 
– A minimum cost-per-quantity is set, and the exporter agrees not to sell under this amount.
 

Safeguarding duty

Another additional duty that can be levied against your goods is safeguarding duty. This is where goods from a certain country do not have countervailing or anti-dumping duties levied against them, but are monitored to prevent dumping. 
 
If the imported volume of a safeguarded commodity goes over a pre-set quota, then the safeguarding duty will be levied on goods until the quota period runs out to prevent over-importing or dumping.
 

Beware that multiple additional duties can be levied at once

Anti-dumping, countervailing, or safeguarding duties are separately implemented by governments. Depending on the commodity, the country of origin, and the time of year that you are importing your goods, you might have multiple additional duties levied against your consignment. 

Do you need help with understanding countervailing or anti-dumping duty?

We are here to help you. If you need assistance with countervailing, safeguarding, or anti-dumping duty, please contact one of our experts today. 
 

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