countervailing duty

(noun)

A tax levied on an imported article to offset the unfair price advantage it holds due to a subsidy paid to producers or exporters by the government of the exporting country if such imports cause or threaten injury to a domestic industry.

Related Terms

Examples of countervailing duty in the following topics:

  • Other Barriers

    • Anti-dumping duties: In international trade, dumping refers to a form of predatory pricing in which exported products are priced below the cost of production or below the price charged in the home market.
    • Anti-dumping duties are usually extra taxes levied on the product to neutralize the predatory pricing and bring the price closer to the "normal value. "
    • Countervailing duties: Countervailing duties, or anti-subsidy duties, are extra duties levied on imports in order to neutralize an export subsidy.
    • If a country discovers that a foreign country subsidizes its exports, and domestic producers are injured as a result, a countervailing duty can be imposed in order to reduce the export subsidy advantage.
    • In that respect, countervailing duties are similar to anti-dumping duties in that they both bring a imported product's value closer to the "normal value. "

  • Inventions, Development, and Tycoons

    • The rise of the corporation triggered, in turn, the rise of an organized labor movement that served as a countervailing force to the power and influence of business.

  • Tariffs

    • They are also known as customs duties.
    • Tariffs can also be classified on how the duty amount is valued:
    • For example, a specific tariff would be a fixed $1,000 duty on every car that is imported into a country, regardless of how much the car costs.
    • For example, a compound tariff might consist of a fixed $100 duty plus 10% of the value of every imported car.

  • Principle-Agent Problem

    • The principal hires the agent to perform specific to duties that represent its best interest.
    • In business relationships, the principal will use performance evaluations to ensure that the agent is fulfilling the necessary duties.

  • Economic Decisions

    • Preferences are shaped by perceptions of duty, authority and self-interest.
    • The failure to complete one's duty may cause feelings of guilt.
    • This guilt is and incentive to perform a duty.

  • Small-Business Structure

    • States regulate the rights and duties of partnerships.
    • Co-owners generally sign legal agreements specifying each partner's duties.

  • American Trade Principles and Practice

    • Generalized System of Preferences program, for instance, seeks to promote economic development in poorer countries by providing duty-free treatment for certain goods that these countries export to the United States; the preferences cease when producers of a product no longer need assistance to compete in the U.S. market.
    • Another preferential program, the Caribbean Basin Initiative, seeks to help an economically struggling region that is considered politically important to the United States; it gives duty-free treatment to all imports to the United States from the Caribbean area except textiles, some leather goods, sugar, and petroleum products.

  • "Black Monday" and the Long Bull Market

    • The Brady Commission (a presidential commission set up to investigate the fall) the SEC, and others blamed various factors for the 1987 debacle -- including a negative turn in investor psychology, investors' concerns about the federal government budget deficit and foreign trade deficit, a failure of specialists on the New York Stock Exchange to discharge their duty as buyers of last resort, and "program trading" in which computers are programmed to launch buying or selling of large volumes of stock when certain market triggers occur.

  • The Creation of the Federal Reserve

    • Over the years, the Fed has expanded its duties to include conducting monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system, and providing financial services.

  • What Taxes Do

    • In the United States, Congress has the power to tax as stated in The United States Constitution, Article 1, Section 8, Clause 1: "The Congress shall have the Power to lay and collect Taxes, Duties, Imposts, and Excises to pay the Debts and provide for the common Defense and general Welfare of the United States. " This power was reinforced in the Sixteenth Amendment to the Constitution: "The Congress shall have the power to lay and collect taxes on income, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."