In recession, there is greater risk that countries will implement protectionism measures.
These protectionism measures may affect industries and companies, and thus our investment.
The anti-dumping, anti-subsidy order seems abrupt in newspaper announcements and often caught investors off-guarded. However, it’s actually not an abrupt event.
United States International Trade Commission (US ITC) and US Department of Commerce are two important entities for conducting anti-dumping (AD) and countervailing duty (CVD) (subsidy) investigations and five-year (sunset) reviews. The relevant stature is the Tariff Act of 1930.
US ITC and US Department of Commerce have different roles.
US ITC: “determines whether the U.S. industry is materially injured or threatened with material injury by reason of the imports under investigation”.
U.S. Department of Commerce: “determines whether the alleged dumping or subsidizing is happening, and if so, the margin of dumping or amount of subsidy”.
If both investigations are affirmative, U.S. Department of Commerce will issue an antidumping duty order to offset the dumping or a countervailing duty order to offset the subsidy.
There is also AD/CVD 5-year (Sunset) Reviews where previous AD/CVD order may remain in place or be revoked.
Besides AD/CVD, there are “Global and Special Safeguard Investigations” concerning global safeguard (escape clause) and market disruption. This is under US ITC. Stature is Trade Act of 1974.
From US ITC’s website, we can get lists of useful information for industry analysis from its “research tools”, for examples recent petition, AD/CVD orders, sunset review status/schedule/disposition.
Antidumping and Countervailing Duty Handbook
is a good guide to learn about how filing of AD/CVD is done.
We can find information on :
- petition process
- investigation process
- review process
- historical overview (information on related laws)
The appendixes (with glossary, timetables, sample report, forms, graphic summary) are insightful for learning about anti-dumping, anti-subsidy order. The graphic summary shows for period of 1985-2005, number of cases, value of imports, disposition (% of affirmative, ITC negative, terminated), top 10 countries cited in AD/CVD cases.
Historical Case Statistics from “research tools” has a more detailed import injury case statistics (1980 – 2006).
