INTERNATIONAL TRADE LAW
Antidumping & Countervailing Duty Compliance
Antidumping and countervailing duties (AD/CVD) are extra import duties — frequently far larger than ordinary tariffs — that apply to specific products from specific countries, and they can attach to your goods even if you never knew an order existed. Rates can reach into the triple digits, liability is determined after import, and pleading ignorance is no defense. This checklist explains how AD/CVD orders work and the steps to run before you buy.
What the two duties target
The two remedies address two different unfair-trade problems:
- Antidumping (AD) duties apply when a foreign producer sells goods in the U.S. at less than fair value — below the price in its home market or below its cost. The duty offsets the “dumping margin.”
- Countervailing (CVD) duties apply when foreign goods benefit from a government subsidy — grants, tax breaks, cheap loans, below-market inputs. The duty offsets the subsidy.
Both exist to level the field for U.S. industry, and both are tied to a particular product from a particular country under a specific order.
Two agencies decide; CBP collects
Three federal players run the system, and knowing who does what tells you where a problem can arise:
| Agency | Role |
|---|---|
| Dept. of Commerce (ITA) | Determines whether dumping or subsidies exist and calculates the margin or subsidy rate |
| U.S. International Trade Commission | Determines whether the dumped or subsidized imports cause material injury to a U.S. industry |
| U.S. Customs and Border Protection | Collects cash deposits and assesses the final duties on entries |
An order is issued only if both Commerce finds dumping or subsidization and the USITC finds material injury. Once an order exists, CBP enforces it at the border. For the background on how these remedies fit within trade law, see our explainer on understanding antidumping duties.
The retrospective trap: your deposit is only an estimate
This is the single most important thing to understand about U.S. AD/CVD, and it surprises importers every year. The United States uses a retrospective assessment system. The AD/CVD you pay at entry is a cash deposit at an estimated rate — not your final bill.
The final duty is set later, when Commerce conducts an administrative review of entries over a past period. The final rate can be higher, lower, or the same as your deposit. If it comes back higher, CBP bills you the difference — potentially long after the goods are sold and the margin is spent. Importers who treat the deposit as the final cost can face a large, unexpected liability months or years later.
Scope and evasion: two ways to get caught
Scope. AD/CVD orders cover products described in precise legal language. Whether your product falls inside an order is not always obvious, and getting it wrong is costly. When coverage is unclear, you can request a scope ruling from Commerce for a binding answer rather than guessing.
Evasion. Under the Enforce and Protect Act of 2015 (EAPA, 19 U.S.C. § 1517), CBP runs a formal process to investigate allegations that an importer evaded an AD/CVD order — for example, by transshipping goods through a third country or misdescribing them. EAPA investigations can lead to retroactive duties, withheld liquidation, and penalties, and they are increasingly common. Buying from a supplier who offers to “handle” the duty problem for you is a classic red flag.
The compliance checklist
Before and during sourcing, run these steps:
- Screen for existing orders. Check whether your product and country of origin are subject to an AD/CVD order before you commit to a supplier.
- Confirm scope. If coverage is ambiguous, get a scope ruling rather than assuming you are outside the order.
- Verify true country of origin. Transshipment to dodge duties is evasion — know where goods are actually made.
- Budget for the cash deposit and the true rate. Treat the deposit as an estimate and reserve for a possible upward adjustment after administrative review.
- Keep complete records. Document origin, pricing, and supplier representations; you may need them in a review or an EAPA inquiry.
- Watch for changes. Orders, rates, and reviews change; monitor the products you import.
- Get advice when unsure. Scope, origin, and evasion questions carry outsized risk — resolve them before the goods ship.
These steps belong inside your broader import compliance program, where classification, valuation, and recordkeeping already live.
FAQ
What is the difference between antidumping and countervailing duties? Antidumping duties offset foreign goods sold below fair value; countervailing duties offset foreign government subsidies. Both apply to specific products from specific countries under a Commerce order.
Why might I owe more AD/CVD than I deposited at entry? Because the U.S. uses a retrospective system. Your deposit is an estimate; Commerce sets the final rate in a later administrative review, and it can be higher than what you paid.
How do I know if my product is subject to an order? Check current AD/CVD orders for your product and country, and request a scope ruling from Commerce if coverage is unclear. Do not rely on a supplier’s assurance alone.
What is an EAPA investigation? A CBP investigation, under the Enforce and Protect Act of 2015, into whether an importer evaded an AD/CVD order — often through transshipment or misdescription. It can result in retroactive duties and penalties.
Importing goods that may face AD/CVD? Reidel Law Firm prepares flat-fee Import/Export Compliance Memos covering AD/CVD scope, country-of-origin, and evasion risk — with direct access to the trade attorney handling your matter. Request a compliance memo →
