Antidumping and Countervailing Duties: A Practical Guide for Importers

Antidumping and countervailing duty orders are the trade remedy mechanism most likely to blindside an importer. Unlike Section 301 tariffs, which are widely publicized and broadly applied, AD/CVD orders are product- and country-specific — and the rates can be extraordinarily high, sometimes exceeding 100% or even 200%.

An importer who doesn't know an AD/CVD order covers their product can end up with a duty bill many times larger than expected when CBP liquidates the entry — sometimes years after importation.

This guide explains how the AD/CVD system works, how to check if your products are covered, and how to manage your exposure.

The Difference Between Antidumping and Countervailing Duties

These are two distinct legal mechanisms, though they're often grouped together:

Antidumping duties (AD) are imposed when a foreign producer sells goods in the US at a price below the "normal value" — typically the home market price or a constructed value based on cost of production plus profit. If that below-cost pricing injures US domestic producers, the US Department of Commerce calculates an AD rate to offset the dumping margin.

Countervailing duties (CVD) are imposed when a foreign government provides subsidies to its domestic producers — direct grants, preferential loans, tax benefits, underpriced raw materials — that disadvantage US competitors. Commerce calculates the subsidy value and imposes a CVD rate to countervail (offset) the subsidy.

Both require an injury finding by the US International Trade Commission (ITC) before duties can be imposed. The investigation process involves the domestic industry (the petitioner), the foreign government, and the foreign producers.

How Rates Are Set — and Why They Can Be So High

AD rates are calculated by comparing the US export price to the normal value in the home market. For countries designated as "non-market economies" (China is the primary example), Commerce uses a "surrogate country" methodology — essentially constructing a fictional home market cost using input prices from a comparable market economy. This methodology tends to produce higher AD rates than standard calculations.

Some AD rates exceed 100% — not because someone is selling at half price, but because of how the surrogate country calculation works and because producers who don't participate in Commerce's administrative reviews receive the highest "adverse facts available" (AFA) rate.

What this means practically: If an AD order exists on your product from a particular country, and your supplier was not specifically reviewed by Commerce, your supplier may be subject to the AFA rate — which can be 100%, 200%, or more.

CVD rates are typically lower (measured against the actual value of subsidies), but can be substantial for heavily subsidized industries.

The Cash Deposit Rate Problem

This is the AD/CVD feature that catches importers off guard.

When you import a product subject to an AD order, you pay a cash deposit at the rate in effect at the time of entry. This rate is based on the most recent annual administrative review. However, at a later date — sometimes 1–3 years later — Commerce conducts another annual review that may change the rate retroactively.

The entry is then liquidated at the final rate from the review, which may be higher or lower than what you paid as a cash deposit. If the final rate is higher, you owe the difference. If lower, you get a refund.

The nightmare scenario: You import goods in January paying a 15% cash deposit rate. Two years later, Commerce finalizes a review setting the rate at 80% for your entry period. You receive a bill for the 65% difference — on two years of imports. This is not hypothetical — it happens regularly.

For this reason, importers dealing with AD/CVD orders typically work closely with their customs broker and, often, a trade attorney to:

• Understand the rate their specific supplier carries
• Monitor pending administrative reviews
• Negotiate supplier contracts that allocate AD risk

Major Current AD/CVD Orders

AD/CVD orders cover hundreds of products. Here are some of the largest and most commercially significant:

Steel products — The US has AD/CVD orders on cold-rolled steel, hot-rolled steel, corrosion-resistant steel, and other steel products from China, Germany, Japan, South Korea, Taiwan, and many other countries. Rates vary dramatically by producer.

Aluminum extrusions — AD/CVD orders on extruded aluminum products from China, with rates exceeding 100% for many producers. China AD/CVD on aluminum extrusions is one of the most-investigated orders due to scope disputes.

Solar cells and panels — Multiple overlapping AD/CVD orders on solar cells from China, and more recent orders covering cells produced in Cambodia, Malaysia, Thailand, and Vietnam using Chinese components. This order has significant scope complexities.

Wooden cabinets and vanities — AD/CVD orders on kitchen and bathroom cabinets from China, with rates that have forced significant supply chain shifts to Vietnam and other countries — which have then themselves come under investigation.

Wooden bedroom furniture — One of the longest-running and largest orders, covering wooden furniture from China. Rates vary substantially by producer.

Paper and paperboard products — Multiple orders on various paper products from China and other countries.

Seafood — AD orders on shrimp from multiple Southeast Asian countries, crawfish from China, and salmon from various countries.

Tires — AD/CVD orders on certain passenger vehicle and light truck tires from China.

This list is illustrative, not exhaustive. The full list of active orders is maintained by the Commerce Department's International Trade Administration.

How to Check If Your Product Is Covered

Checking AD/CVD coverage requires several steps:

1. Check the ITA's AD/CVD database. The International Trade Administration maintains a searchable database of all active orders. Search by country and product description.

2. Read the scope carefully. The scope of an AD/CVD order describes exactly which products are covered, usually with reference to physical characteristics, intended use, and sometimes specific HTS codes. Products that seem similar may or may not be covered.

3. Request a scope ruling if uncertain. If your product is arguably within the scope of an existing order, you can petition Commerce for a formal scope ruling — an official determination of whether your product is covered. These take time (typically several months) but provide certainty.

4. Check for circumvention investigations. If you've moved sourcing from China to Vietnam (or another third country) to avoid an order, be aware that Commerce investigates "circumvention" — where Chinese-origin components are assembled in a third country to avoid the order. These investigations can result in the third-country product being declared within scope.

What Happens If You Don't Know

Importers who are unaware of an AD/CVD order face the same liability as those who knowingly import covered goods. Ignorance of the order is not a defense. CBP enforces AD/CVD at the border and through post-entry audit.

The consequences include:

• Retroactive duty assessment — CBP can liquidate open entries at the correct AD rate
• Interest — unpaid AD/CVD accrues interest from the entry date
• Evasion penalties — under the Enforce and Protect Act (EAPA), if CBP finds you imported covered goods while intentionally misrepresenting their origin or nature, penalties can be severe

When an entry is opened for AD/CVD investigation, the importer's bond may be called. For large importers, the bond exposure can be enormous.

Working With Your Supply Chain on AD/CVD

If your product category has AD/CVD orders, your relationship with your supplier needs to account for this:

Know your supplier's AD rate specifically. The order applies to the country, but rates vary by producer. If your Chinese supplier was reviewed by Commerce, they have a specific rate. If they were not reviewed (or are a "new shipper"), the rate may default to the AFA rate, which is typically much higher.

Require suppliers to notify you of rate changes. If Commerce conducts an administrative review that changes your supplier's rate, you need to know immediately.

Structure contracts to allocate the risk. Who bears the liability if the final liquidated rate is higher than the cash deposit paid? This should be addressed in your supply contract, not left ambiguous.

Consider requesting a new shipper review. If you're importing from a producer who has never been reviewed by Commerce, they may be eligible for a "new shipper review," which establishes their individual rate. This often results in a lower rate than the AFA default.

Key Takeaways

• AD/CVD orders are product- and country-specific with rates that can exceed 100%
• The cash deposit rate you pay at entry is not final — administrative reviews can change rates retroactively
• Always verify whether your specific supplier has been reviewed by Commerce and what their individual rate is
• Scope is a legal question — if your product is arguably covered by an order, get a formal scope ruling
• Circumvention investigations extend AD/CVD coverage to goods assembled in third countries using covered components

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TariffClassify flags AD/CVD orders when they're detected in our TariffOverlay database. For a comprehensive review of your AD/CVD exposure, consult a licensed customs broker or trade attorney who specializes in trade remedies.