Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
The U.S. Department of Commerce is preparing to tax aluminium sheet exporters from 18 countries including India after determining that they had benefited from subsidies and dumping.
- The US International Trade Commission (ITC), an independent body, must approve the final decision by April 15 to impose anti-dumping or countervailing duties.
What is Dumping?
In international trade practise, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market.
- Dumping impacts the price of that product in the importing country, hitting margins and profits of local manufacturing firms.
What is anti-dumping duty?
Anti-dumping duty is imposed to rectify the situation arising out of the dumping of goods and its trade distortive effect.
- According to global trade norms, including the World Trade Organization (WTO) regime, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers.
How is it different from CVD?
- Anti-dumping duty is different from countervailing duty. The latter is imposed in order to counter the negative impact of import subsidies to protect domestic producers.
- Countervailing Duties (CVDs) are tariffs levied on imported goods to offset subsidies made to producers of these goods in the exporting country.
- CVDs are meant to level the playing field between domestic producers of a product and foreign producers of the same product who can afford to sell it at a lower price because of the subsidy they receive from their government.
- About DGTR.
- What is anti dumping duty?
- What is CVD?
Sources: the Hindu.