Countervailing Duties

Countervailing duties (CVDs), also known as anti-subsidy duties, are trade import duties imposed under World Trade Organization(WTO) rules to neutralize the negative effects of subsidies. They are imposed after an investigation finds that a foreign country subsidizes its exports, injuring domestic producers in the importing country.

According to World Trade Organization rules, a country can launch its own investigation and decide to charge extra duties, provided such additional duties are in accordance with the GATT Article VI and the GATT Agreement on Subsidies and Countervailing Measures.

In cases foreign producers attempt to subsidize the goods being exported by them so that it causes domestic production to suffer because of a shift in domestic demand towards cheaper imported goods, the government makes mandatory the payment of a countervailing duty on the import of such goods to the domestic economy.

Recently WTO Dispute Panel Report Finds Countervailing Duty (CVD) imposed by US on India’s Exports Of ‘Hot-Rolled Carbon Steel Flat Products’inconsistent with WTO Law on Subsidies.

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