What are anti-dumping duties and why are they imposed?

Anti-dumping duties (ADDs) are tariffs imposed by the U.S. government to enforce fair competition in the market. They are assessed against producers of certain commodities when there is sufficient evidence of dumping. ADDs protect domestic businesses from unfair pricing practices employed by some foreign companies.

How can I find out if the goods I want to import are subject to anti-dumping duties?

To determine if your goods are subject to ADDs, you should reference the International Trade Administration’s (ITA) list of active AD/CVD orders. Consulting with a licensed U.S. customs broker is also a reliable way to ensure your goods are not subject to additional duties.

What are the penalties for attempting to circumvent anti-dumping duties?

Using deceptive practices to avoid ADDs, such as misrepresenting the country of origin or using incorrect HTS codes, is illegal. If discovered by Customs and Border Protection (CBP) agents, this can result in hefty fines, seizure of goods, and increased scrutiny on future shipments. Legal methods to avoid ADDs include not purchasing from businesses with ADD orders or filing for a customs duty drawback if the goods are re-exported or disposed of.

How to Avoid Anti Dumping Duty

Getting hit with expensive and unexpected anti-dumping duties is something many importers have experienced. Find out how to legally and effectively avoid anti-dumping duties when importing.

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If you import goods for resale, you’ve probably heard the old adage, “Buy low, sell high”. However, goods that are priced far below market value can actually hurt the American economy. To combat this issue, the U.S. government may apply anti dumping duties to those goods.

Key Takeaways

Dumping occurs when foreign entities sell goods in the U.S. below their normal value, which can undermine fair market competition and domestic industries.
Anti-Dumping Duties (ADDs) protect U.S. businesses from unfairly priced imports, ensuring fair competition and preventing market manipulation.
Importers must reference government websites using Harmonized Tariff Schedules (HTS) codes to determine if these extra fees apply to their ordered goods.
Avoiding anti-dumping duties comes down to avoiding purchases from businesses whose products have received ADD orders from the U.S. government.

Continue reading to find out more about anti dumping duties and how to avoid them.

What Is Dumping in International Commerce?

Dumping occurs when a foreign entity attempts to sell goods in the U.S. at a price far below their normal market value.

Dumping goods is considered a malicious business tactic. While it may seem unwise to sell products overseas at little to no profit, doing so strategically can cause competing U.S. suppliers to suffer huge sales losses and go out of business.

By taking a temporary loss, the foreign business can dictate the supply, quality, and price of the product going forward. Obviously, this is not ideal for consumers or the U.S. job market.

In order to discourage and frustrate the efforts of dumpers, the U.S. government investigates suspected incidences of the practice and, when found necessary, levies anti-dumping duties.

What is an Anti Dumping Duty?

An anti dumping duty is a tariff imposed by a domestic government in order to enforce fair competition in a free market economy. The duty is assessed by U.S. government agencies against producers of certain commodities when there’s sufficient reason to suspect dumping is occurring. Anti-dumping duties are intended to protect domestic producers from unfair business practices employed by some overseas businesses.

A similar tariff, called a countervailing duty, may be assessed if there’s reason to believe a foreign government is subsidizing production costs for a business. We examine these in detail in our article “How to Calculate Countervailing Duty”.

Whose Role Is It To Make Sure Dumping Doesn’t Occur?

There are three U.S. government agencies that play key roles in investigating potential cases of dumping, levying ADDs, and enforcing them.

United States International Trade Commission (ITC): This organization investigates potential cases of dumping within the United States.

United States Department of Commerce (DOC): Under the direction of the ITC, the Department of Commerce’s (DOC) Enforcement and Compliance unit is the government agency that calculates the margin of dumping for a given case.
Customs and Border Protection (CBP): CBP enforces anti dumping duties by collecting payment from importers. They’re also under the instruction of the DOC to inspect shipments that are potentially subject to ADDs and have been improperly labeled.

There is a fourth agency involved in anti-dumping duties, but they operate on an international level: The World Trade Organization (WTO). This organization doesn’t determine anti-dumping duty rates or enforce their application. Rather, their role has more to do with investigating whether an ADD order is valid in the first place.

Learn more about how these duties are calculated in our article “Anti Dumping Duty Rates: The Price of Fair Trade”.

How Can I Avoid Anti Dumping Duties?

The best way to avoid an ADD is fairly simple: don’t import goods under an anti-dumping order. So, how can you find out if the products you want to import are subject to an ADD?

One of the first things you should do is take a look at the International Trade Administration’s (ITA) list of active AD/CVD orders. To help illustrate where most of these orders have been levied, I’ve compiled the five countries with the most AD/CVD orders from the U.S. in the table below.

An infographic titled “Top Five Countries With Anti-Dumping/Countervailing Duties in 2024. The graphic is labeled “Name of Country” on the left and “Number of Active AD/CVD Orders as of July 2024” along the bottom. The information is presented in the form of a bar graph and reads as follows.

China: 236 orders
India: 73 orders
South Korea: 46 orders
Taiwan: 33 orders
Turkey: 30 orders

You probably noticed that China has more active orders than the other four countries combined. This is due to Section 301 tariffs enacted during the Trump administration and expanded upon by President Biden. If you plan to import anything from China, be sure to check the Section 301 trade action lists. There’s an above-average chance your products will incur additional duty rates.

If you plan to re-export or destroy/dispose of the goods in question, you may be able to avoid anti-dumping duties after the fact by filing for a customs duty drawback. This is essentially a refund of duties and taxes paid on qualifying imported shipments.

For those who aren’t familiar with the intricacies of government documentation practices, the most surefire way to identify and avoid anti-dumping duties is by consulting with a licensed U.S. customs broker. Brokers are, by necessity, up-to-date with all the latest anti-dumping duties, and they can put that knowledge to work for you.

Penalties For Trying to Circumvent Anti Dumping Duties

For purposes of clarification, avoiding ADDs using the methods discussed above is perfectly legal. What’s never legal is using deceptive practices to make it seem like a shipment subject to increased duties actually isn’t.

Tactics such as citing the wrong country of origin or using an incorrect HTS code to circumvent anti-dumping duties will almost certainly be discovered by CBP agents when your shipment arrives. This can lead to hefty fines, seizure of your goods, and higher scrutiny on any future shipments you bring into the U.S.

Avoid Anti Dumping Duty With USA Customs Clearance

Finding out whether goods will be subject to anti-dumping duties isn’t always easy, and inexperienced importers can easily find themselves owing extra fees at the border that eat into their profits. This is one of many reasons why it makes sense to partner with a U.S. customs expert. That’s where we come in.

USA Customs Clearance has fully licensed customs brokers who can consult with you over the phone via 45-minute sessions so that you can learn the ins and outs of the process and determine if your goods are subject to additional duties. We can even provide full brokerage services, leaving you free to focus on your business while we handle documentation and processing of your shipment.

Our other customs services include:

Give the import experts at USA Customs Clearance a call at (855) 912-0406 or submit a contact form online to find out exactly how we can bring your business to the next level.