Background

U.S. Customs and Border Protection’s annual report on the distribution of antidumping and countervailing duties to domestic producers shows that such distributions saw another significant decline in fiscal year 2019. As a result, retaliatory tariffs by the European Union, Japan, and others that are already small could see further declines.

The Continued Dumping and Subsidy Offset Act, commonly referred to as the Byrd Amendment, allowed the U.S. to distribute AD and CV duties collected on foreign-made goods to affected domestic industries. The law was found to violate World Trade Organization rules and subsequently repealed, but distributions continue for entries of goods made prior to Oct. 1, 2007.

In response, the WTO allows each affected country or economy to raise its tariffs on goods imported from the U.S. in direct relation to the amount of AD and/or CV duties on goods from that country or economy that were distributed during the previous year. In FY 2019, a total of $15.5 million in AD/CV duties was distributed, down 33.8 percent from FY 2018. This should further reduce the amount of retaliatory sanctions imposed by U.S. trading partners.

However, the amount of AD/CV duties on CDSOA-eligible entries filed prior to Oct. 1, 2007, and liquidated during FY 2019 that went uncollected totaled $30.8 million, a major increase from $333,417 in FY 2018 and higher than the $20.8 million registered in FY 2017. The three orders for which duties went uncollected include honey from China ($21.8 million), fresh garlic from China ($8.9 million), and brake rotors from China ($102,500). If these duties are later collected and distributed, the result could be higher retaliatory sanctions.

In addition, a total of $10.7 million in AD duties and $901,741 in CV duties filed with the entry prior to Oct. 1, 2007, on CDSOA-eligible cases remained in the CDSOA clearing account as of Oct. 1, 2019, down from $17.2 million and $903,058, respectively, from the previous year. Individual cases with the highest amounts included crawfish tail meat from China ($2.42 million), petroleum wax candles from China ($1.42 million), and fresh garlic from China ($802,515).

CBP notes that funds do not transfer from the clearing account to the special account for distribution until liquidation occurs.

For more information on AD/CV duties and other trade remedy issues, please contact trade attorney Kristen Smith at (202) 730-4965.

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