Countervailing duty (CVD)

Definition

A countervailing duty (CVD) is an extra import duty imposed on a specific product from a specific country when the Commerce Department determines that the foreign government is subsidizing the producer and the US ITC determines that domestic industry is materially injured. CVDs are conceptually parallel to antidumping duties (AD) but address subsidies rather than below-cost pricing. CVD rates are producer-specific and country-specific. They stack on top of MFN and every other tariff layer, and stack on top of AD duties when both apply (a so-called AD/CVD case). CVD orders are reviewed annually by Commerce in administrative reviews, with cash-deposit rates adjustable up or down based on the review findings.