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Countervailing duty (CVD) is imposed by the importing nation on imports if the exporting nation is found to offer export subsidies to their exports. This measure aims at balancing the price of imports with the domestic products. This duty is imposed in such a way that imported item also remains competitive.
Similar duty, with the same aim, once imposed by the importing nation in case the exporting country is found to export at below fair market price (it means the exporting nation is dumping the item in the importing nation) is known as ‘anti-dumping’ duty.
Both of the duties are imposed after fulfilling the proper provisions of investigation conducted as per the specifications of the WTO.