Import Duties: Are my Goods Subject to Anti-Dumping or Counter-veiling Duties?
There are a lot of US importers. Research reflects that there are thousands of metric tons imported into the US every year. In 2013, China was our #1 trading partner overall, and #3 for origin of imported goods. The territory of import duties, is not a territory for the uneducated.
And do you know that many goods of Chinese origin among many others, are subject to additional import duties beyond those you might normally pay under our tariff classification. Why?
Anti-Dumping Import duties
A potentially injured domestic party may bring a case to the International Trade Administration (“ITA”). See 19 USC §1675. https://www.law.cornell.edu/uscode/text/19/1675 The ITA will investigate to determine if there is a foreign party selling goods into the United States below their cost (dumping) which is the cause of the injury to the domestic party who initiated the action. If the investigation finds that (a) the foreign party is selling below his costs; and (b) that this result in injury to the domestic party, then the ITA will issue an anti-dumping SCOPE ORDER. The scope order will define what products, by description, with suggested but not dispositive tariff classification numbers, and the associated anti-dumping duty (“ADD”), ether manufacturer specific, or ‘all other” rate from that country. The ADD rate is calculated such that imported goods attract a sufficient additional duty so that the landed cost for free circulation in the US is equivalent to what the goods would have been valued at had the foreign shipper not sold at a below-cost price point, and thereby offer the injured domestic party a more fair level of competition.
Counter-Veiling Import duties
Similar to ADD, counter-veiling import duties (“CVD”) are similarly imposed, but rather than being based on a foreign entities sales at below, offer relief based on foreign entities receiving government subsidies to lower their internal cost of doing business.
In both cases…
As the importer, you are responsible for knowing your goods are subject to an ADD or CVD order. If so, then your Customs declaration must be of the type corresponding to the type of import duties imposed. Your customs broker can help you identify this entry filing type. Moreover, in each case, you, typically through your broker, will have to include the ORDER NUMBER on your entry documents. This may sound simple enough, but the scope orders are highly technical and, making a determination as to whether your goods are within the scope of the order or not is a potentially challenging event. Also, ADDs and CVDs are constantly changing, being ‘sunsetted’, or newly established, so a best practice for every importer is to review all scope orders on a periodic basis to verify that there are no applicable changes. Business Issues Some ADD or CVD rates are as much as 100% of the value of the goods. Sometimes, these additional import charges do not accrue to the importer for many months, or even years due to internal government reviews. How can you be sure you are covering all your costs in such an uncertain environment when pricing your imported goods for resale?