Thursday, December 8, 2011

Anti-Dumping Duties - Protection from Lowball Pricing

What are anti-dumping duties? Duties imposed against goods from foreign countries that are sold significantly lower in their country of origin or comparable third country markets - destroying the U.S. market for that product in the process.

For example: Company X, an exporter from China is selling massive quantities of iPod's to U.S. resellers for the wholesale price of $50 a piece when the average price for an iPod sold at wholesale price in China is $200 a piece.

So what? a great deal is just that, a great deal, who determines whether it reaches the level of anti-dumping.

There are two players involved. The International Trade Commission (USITC) and the U.S. Department of Commerce, but each address a different issue.

"Commerce determines whether the alleged dumping . . . is happening, and if so, the margin of dumping. The USITC determines whether the U.S. industry is materially injured or threatened with material injury by reason of the imports under investigation."

If the investigation of both agencies finds anti-dumping, Company X from China will face anti-dumping duties in addition to any duties they must pay under normal circumstances - enforcement of the anti-dumping duties via Customs and Border Protection.

How do these agencies find out about the potential anti-dumping? Generally, the agencies are prompted to investigate after receiving word from a business harmed by the influx of cheap goods (e.g., your competitors!)

Happy Importing :)

www.customsesq.com

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