Quick Answer
An anti-dumping duty is an extra duty an importing country imposes on goods exported at less than their normal value. According to the World Trade Organization (WTO), before imposing anti-dumping measures a member must establish through an investigation that: (1) there is dumping, (2) the domestic industry producing the like product is materially injured, and (3) there is a causal link between the two. “Normal value” is generally the price of the product in normal trade in the exporting country’s home market. Anti-dumping measures should in principle end five years after they are imposed, unless a sunset review finds that ending them would likely lead to renewed dumping and injury.
How Is Dumping Determined?
The WTO explains that dumping is assessed by comparing normal value with the export price:
- Normal value: usually the price of the product in the ordinary course of trade for consumption in the exporting country’s home market. If there are no home market sales or similar situations, the Agreement allows other calculation methods.
- Export price: the price at which the product is exported to the importing country.
- Dumping margin: the amount by which normal value exceeds the export price.
If the dumping margin or import volume is below the Agreement’s de minimis or negligible thresholds, the investigation must be terminated.
Anti-Dumping Investigation Process (Overview)
| Stage | What happens |
|---|---|
| Application | Usually a written application by or on behalf of the domestic industry |
| Initiation | Authorities review whether the application has sufficient support and evidence |
| Investigation | Calculate dumping margins, investigate injury and causation; parties submit information |
| Preliminary and final determinations | Results published; provisional or definitive duties may be imposed |
| Sunset review | Measures end after five years in principle, unless a review decides they should continue |
The WTO Agreement also requires public notice at each stage (initiation, preliminary and final determinations) and disclosure of non-confidential information.
How Are Anti-Dumping Duties Related to Origin?
Anti-dumping duties are imposed on specific products from specific countries (sometimes specific producers), so origin decides whether goods must pay them. The first use of rules of origin listed by the WTO is implementing trade policy measures such as anti-dumping duties. That is why some try to “change origin” by transshipment, which is illegal; the United States even has the Enforce and Protect Act (EAPA) specifically to investigate evasion of anti-dumping and countervailing duties. See The Legal Risks of Transshipment to Evade Tariffs.
What Should Importers Watch For?
- Check before buying: whether the destination country imposes anti-dumping duties on the product from that origin; rates may differ by exporter.
- Confirm origin: origin is decided by the importing country’s rules; request an advance ruling if needed.
- Include it in landed cost: anti-dumping duties can change landed cost significantly, so factor them into quote comparisons.
- Evaluate alternative sources: legally, consider suppliers in other countries.
- Keep documents complete: certificates of origin and production records must support your origin claim.
How Tang Sugar Can Help
Tang Sugar’s international sourcing agent service can help evaluate supply sources in several countries, and our triangular and multilateral trade service plans supply routes within the law based on tariff agreements and rules of origin. To evaluate sources or routes, contact us.
FAQ
What is an anti-dumping duty?
An extra duty an importing country imposes on goods exported below normal value, to offset the injury dumping causes to its domestic industry.
How is dumping determined?
By comparing normal value (usually the normal home-market price in the exporting country) with the export price; if normal value is higher, there is a dumping margin. Material injury to the domestic industry and a causal link must also be found.
How long do anti-dumping duties last?
Under the WTO Anti-Dumping Agreement, they should in principle end five years after imposition, unless a sunset review finds that ending them would likely lead to renewed dumping and injury.
Can transshipping through a third country avoid anti-dumping duties?
No. Anti-dumping duties are based on origin, and transshipment doesn’t change origin; evading them through transshipment or false origin labeling is illegal.
Is an anti-dumping duty a tariff?
Yes. It is an additional duty on top of the normal tariff, imposed on goods exported below normal value.
Further Reading
- What Are Rules of Origin?
- What Happens If You Transship to Evade Tariffs?
- The Overseas Procurement Process
- What Is the Export Zero Tax Rate in Taiwan?
Sources
- World Trade Organization: Anti-dumping: Technical Information
- World Trade Organization: Technical Information on Rules of Origin
- U.S. Customs and Border Protection: Enforce and Protect Act (EAPA)
