countervailing duty: meaning, definition, pronunciation and examples
C2Formal, Technical, Legal
Quick answer
What does “countervailing duty” mean?
A tariff imposed on imported goods to offset subsidies provided to producers or exporters by the government of the exporting country.
Audio
Pronunciation
Definition
Meaning and Definition
A tariff imposed on imported goods to offset subsidies provided to producers or exporters by the government of the exporting country.
A protective trade measure used to neutralize the negative competitive effects of foreign government subsidies, ensuring fair competition for domestic industries.
Dialectal Variation
British vs American Usage
Differences
No significant differences in meaning. UK usage is common in Commonwealth trade contexts; US usage is prominent in WTO and USITC (United States International Trade Commission) discourse.
Connotations
Connotes a legally sanctioned, rule-based response to unfair trade practices.
Frequency
Higher frequency in US legal and political discourse due to active use of trade remedies; common in UK/EU trade policy discussions.
Grammar
How to Use “countervailing duty” in a Sentence
[Government/Authority] imposes a countervailing duty on [product] from [country] to offset [subsidy].Vocabulary
Collocations
Examples
Examples of “countervailing duty” in a Sentence
noun
British English
- The EU imposed a countervailing duty on Chinese steel after finding evidence of state subsidies.
- The rate of the countervailing duty was set at 15%.
American English
- The Commerce Department recommended a countervailing duty on Canadian softwood lumber.
- The petition requested countervailing duties against Mexican agricultural products.
Usage
Meaning in Context
Business
The board discussed the potential impact of new countervailing duties on our supply chain costs.
Academic
The paper analyses the economic welfare effects of countervailing duties under imperfect competition.
Everyday
Rarely used in everyday conversation outside of news about trade wars.
Technical
Following the affirmative determination of subsidization and injury, a provisional countervailing duty was applied.
Vocabulary
Synonyms of “countervailing duty”
Vocabulary
Antonyms of “countervailing duty”
Watch out
Common Mistakes When Using “countervailing duty”
- Misspelling as 'counterveiling' or 'countervailing'. Using it interchangeably with 'anti-dumping duty' (which targets low prices, not subsidies).
FAQ
Frequently Asked Questions
A countervailing duty targets goods benefiting from foreign government subsidies. An anti-dumping duty targets goods sold for less than their normal value (often below the domestic price or cost of production) in the exporting country.
They are imposed by a national government's relevant authority (e.g., the U.S. International Trade Commission, the European Commission) following an investigation that proves subsidization and injury to the domestic industry.
Yes, they are a permitted trade remedy under the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), provided strict investigation procedures are followed.
Yes, if an imported product is both subsidized by its government and sold at dumped prices, it can be subject to both types of duties concurrently.
A tariff imposed on imported goods to offset subsidies provided to producers or exporters by the government of the exporting country.
Countervailing duty is usually formal, technical, legal in register.
Countervailing duty: in British English it is pronounced /ˌkaʊntəˈveɪlɪŋ ˈdjuːti/, and in American English it is pronounced /ˌkaʊntərˈveɪlɪŋ ˈduːti/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “Level the playing field (related concept)”
Learning
Memory Aids
Mnemonic
Think: 'counter' (against) + 'vailing' (from 'avail', meaning benefit) + 'duty' (tax). It's a tax against the benefit (subsidy) given to foreign goods.
Conceptual Metaphor
A SCALE-BALANCER (a weight added to one side of a scale to balance an unfair weight on the other).
Practice
Quiz
What is the primary purpose of a countervailing duty?