Counter Vailing Duties (CVD) are often imposed on imports to offset the impact of

Key Points ​Counter Vailing Duties (CVD):

• Counter Vailing Duties are tariffs imposed on imported commodities to compensate for subsidies given to producers of these goods in the exporting country.
• Countervailing duty (CVD) is a specific form of duty that the government imposes in order to protect domestic producers by countering the negative impact of export subsidies.

Important Points Why Counter Vailing Duties are imposed?

• Foreign governments may grant subsidies to their producers in order to make their products cheaper and increase demand in other nations.
• To prevent these commodities from flooding the importing country's market, the importing country's government applies a countervailing tax, charging a specific amount on imports of these goods.
• The tariff raises the price of the imported product, bringing it closer to market value. The government can ensure a level playing field for domestic products in this way.

Additional Information

•  Predatory pricing: A predatory pricing strategy is a pricing strategy in which goods or services are supplied at a very low price point in order to drive out competitors and create entry barriers.
• Dumping: In the financial sector, dumping happens when a firm or country sells its products at a cheaper price than it charges domestically. Exporters dump to compete with the importing country's producers and sellers.