Trade Remedy (Antidumping & Countervailing Duties)
Trade remedies are government actions to protect domestic industries from unfair foreign trade practices. The two primary trade remedies in U.S. law are antidumping duties (AD) and countervailing duties (CVD), which together affect over $100 billion in annual U.S. imports across hundreds of product categories.
Antidumping Duties (AD)
What They Address
Dumping occurs when a foreign company sells goods in the U.S. at a price below fair market value — typically below what it charges in its home market or below its cost of production. Antidumping duties offset this price advantage.
How They Work
- A U.S. industry or the Department of Commerce initiates an investigation
- The International Trade Administration (ITA) determines whether dumping occurred and calculates the dumping margin (the difference between fair value and the U.S. price)
- The U.S. International Trade Commission (USITC) determines whether the domestic industry is materially injured
- If both findings are affirmative, AD duties are imposed equal to the dumping margin
Example
A Chinese steel producer sells hot-rolled steel in China for $800/ton but exports it to the U.S. for $500/ton. The dumping margin is $300/ton (37.5%), and an AD duty of 37.5% is imposed.
Countervailing Duties (CVD)
What They Address
CVDs offset foreign government subsidies that give exporters an unfair competitive advantage. Subsidies can include direct cash payments, below-market loans, tax breaks, free land or utilities, or any government benefit that reduces production costs.
How They Work
- Investigation initiated (same process as AD)
- ITA determines whether countervailable subsidies exist and calculates the subsidy rate
- USITC determines injury to the domestic industry
- If both findings are affirmative, CVD rates are imposed equal to the net subsidy
Example
A government provides a solar panel manufacturer with subsidized electricity, low-interest loans, and export tax rebates totaling 15% of production cost. A CVD of 15% is imposed on that company's exports to the U.S.
AD/CVD Combined with Other Tariffs
Trade remedy duties stack on top of all other tariff programs:
| Layer | Example |
|---|---|
| MFN base duty | 3% |
| Antidumping duty | 37.5% |
| Countervailing duty | 15% |
| Section 122 surcharge | 15% |
| Section 232 (steel) | 25% |
| Total | 95.5% |
For some Chinese steel products, combined duties exceed 500% when all AD/CVD orders and tariff programs are included.
Key Differences from Section 301 and Section 232
| Feature | AD/CVD | Section 301 | Section 232 |
|---|---|---|---|
| Target | Specific companies/products | Country trade practices | National security threats |
| Investigation | ITA + USITC | USTR | Commerce |
| Rate basis | Calculated per company | Set by policy | Set by President |
| Duration | Reviewed annually; can last decades | Presidential discretion | No expiration |
| WTO compliance | Generally WTO-compliant | Contested | Contested |
Why Trade Remedies Matter in 2026
The new Section 301 overcapacity investigation may lead to findings that also trigger AD/CVD investigations. If USTR determines that Chinese industrial subsidies are causing overcapacity in solar, EVs, batteries, or shipbuilding, those findings could support parallel AD/CVD cases that would impose additional duties on top of existing Section 301 and Section 122 rates.
For importers, this means products that already face 40-65% combined tariffs could see even higher rates if AD/CVD orders are added.
Related: Section 301 Tariffs | Section 232 | New Section 301 Overcapacity Investigation