Countervailing Duties
A duty placed on imported goods that are being subsidized by the importing government. This helps to even the playing field between the domestic producers and the foreign producers receiving subsidies. Investopedia Says:
Subsidized goods allow a producer to sell at a lower price than it could without the subsidy compensation. If this producer sells into the international market, they can often undercut the pricing of producers in other countries who don't receive subsidies from their government. If the subsidized foreign producer goes unchecked, the domestic producers could be run out of business, causing lost jobs and other economic losses. Related Terms:
Export
Import
Subsidy
Tariff
Trade Sanction
Voluntary Export Restraint - VER
World Trade Organization - WTO |