Dumping + CVD (countervailing duty)

 

Dumping in economics is a type of predatory pricing talked about particularly in the international commerce space. Dumping is said to happen when manufacturers or marketers export a product to another nation at a price that is lesser than the home country price or lesser than the production cost. This is done with the intention of enhancing the market share in a foreign market or to remove competition.

Countervailing duties (CVDs) are trade import tariffs imposed to nullify the adverse effects of subsidies. They are imposed only under World Trade Organisation rules and are also called anti-subsidy duties. They are levied if a country investigates and finds out that a foreign country is subsidising its imports to the home country thus harming domestic suppliers. Then, as per WTO rules, the country can charge additional duties in agreement with the GATT Agreement on Subsidies and Countervailing Measures and the GATT Article VI.

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