COUNTERVAILING DUTY Meaning and
Definition
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A countervailing duty refers to a customs duty or tax imposed by a government on imported goods in order to offset or counterbalance the impact of unfair trade practices, such as subsidies or other forms of government support, conducted by foreign producers or exporters in their home countries. The primary objective of countervailing duties is to provide a level playing field for domestic industries and protect them from the adverse effects of distorted competition.
Countervailing duties are enacted when it is determined that a foreign country's producers are receiving substantial subsidies, financial assistance, or preferential treatment from their government, which allows them to sell their goods at lower prices in the importing country. This practice is regarded as unfair because it can lead to the displacement or undercutting of domestic industries and hinder fair competition.
The imposition of countervailing duties typically involves an investigation initiated by the importing country to determine whether subsidization exists and if it is causing injury to the domestic industry. If such findings are made, the government has the authority to impose countervailing duties on the relevant imports, effectively increasing their prices to offset the benefit obtained through government support.
Countervailing duties are an important tool in international trade regulation, helping to restore fair competition and protect domestic industries from unfair trade practices. They aim to balance market conditions by neutralizing the advantages gained by foreign producers through subsidies, thereby ensuring a more level playing field for all participants in the global marketplace.
Common Misspellings for COUNTERVAILING DUTY
- xountervailing duty
- vountervailing duty
- fountervailing duty
- dountervailing duty
- ciuntervailing duty
- ckuntervailing duty
- cluntervailing duty
- cpuntervailing duty
- c0untervailing duty
- c9untervailing duty
- coyntervailing duty
- cohntervailing duty
- cojntervailing duty
- cointervailing duty
- co8ntervailing duty
- co7ntervailing duty
- coubtervailing duty
- coumtervailing duty
- coujtervailing duty
Etymology of COUNTERVAILING DUTY
The word "countervailing" is derived from the Latin word "contra" meaning "against" and the French word "vaillant" meaning "strong" or "valiant". The term originated in the 16th century as a military term, used to describe actions taken to oppose or counter someone or something. In the context of trade and economics, a "countervailing duty" is a specific type of tariff or tax imposed on imported goods to counterbalance or offset subsidies or other forms of assistance provided to foreign producers by their governments. The use of the term "countervailing" in this context reflects the idea of countering or balancing the advantages gained by foreign producers through the imposition of duties.
Similar spelling words for COUNTERVAILING DUTY
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