Jake Harper
China has been known to impose anti-dumping duties on chicken products from other countries, including the United States and Brazil. These duties are additional tariffs applied to imported goods sold below their normal value, which can harm domestic industries and fair market competition. To avoid paying these duties, importers must understand the regulations and investigate whether their desired products are subject to any additional duties. Consulting with a licensed customs broker can help importers navigate the complexities of government documentation and stay updated on the latest anti-dumping duties. Understanding the calculations and investigations behind anti-dumping duties is essential for importers to make informed decisions and avoid unexpected financial burdens.
| Characteristics | Values |
|---|---|
| Reason for anti-dumping duty | To enforce fair competition in a free market economy and protect domestic producers from unfair business practices |
| Who assesses the duty | US government agencies |
| When is it assessed | When there is a reason to suspect dumping is occurring |
| How to avoid anti-dumping duty | Don't import goods under an anti-dumping order |
| How to find out if products are subject to anti-dumping duty | Refer to government websites using Harmonized Tariff Schedules (HTS) codes |
| How to avoid anti-dumping duty after importing goods | File for a customs duty drawback |
| How to identify and avoid anti-dumping duty | Consult with a licensed US customs broker |
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What You'll Learn
Don't import chicken under an anti-dumping order
Anti-dumping duties (ADDs) are tariffs imposed by governments to enforce fair competition in a free-market economy. They are intended to protect domestic producers from unfair business practices employed by overseas businesses. Dumping occurs when foreign entities sell goods in a market below their normal value, which can undermine fair market competition and domestic industries.
In the context of chicken imports, there have been disputes between the United States and China regarding the imposition of anti-dumping duties. The United States challenged China's Ministry of Commerce (MOFCOM) on its calculation of anti-dumping duties and its conduct of investigations.
To avoid importing chicken under an anti-dumping order, it is essential to understand the regulations and procedures surrounding ADDs. Here are some key points to consider:
- Reference Government Websites: Importers should refer to government websites and utilize Harmonized Tariff Schedules (HTS) codes to determine if extra fees or ADDs apply to the goods they intend to import. This proactive approach ensures importers are aware of any potential additional costs and can make informed decisions.
- Consult with Customs Brokers: For those unfamiliar with the intricacies of government documentation and trade regulations, consulting a licensed customs broker can be beneficial. Customs brokers are well-versed in the latest anti-dumping duties and can provide guidance to help importers navigate the complex landscape of trade regulations.
- Understand the Impact of Section 301 Tariffs: If importing goods from China, it is crucial to consider the Section 301 trade action lists. These lists may indicate an increased likelihood of additional duty rates being applied to goods imported from China. Understanding these tariffs can help importers make informed decisions and potentially avoid unexpected costs.
- Explore Customs Duty Drawback: In certain situations, importers may be able to avoid anti-dumping duties retroactively by filing for a customs duty drawback. This option is typically available if the goods in question are intended for re-export, destruction, or disposal. A customs duty drawback essentially refunds the duties and taxes paid on qualifying imported shipments.
- Monitor Reviews and Updates: It is important to stay updated with any reviews or updates to AD/CVD orders. Commerce conducts annual administrative reviews of AD/CVD orders upon request by interested parties. Staying informed about these reviews can help importers anticipate any changes in duty rates or collection practices.
- Comply with Documentation Requirements: Prior to the liquidation and assessment of anti-dumping duties, importers must comply with documentation requirements. Importers are required to file a certificate advising the relevant authorities of any agreements or reimbursements related to anti-dumping duties. Failure to provide this statement may result in presumed reimbursement and the doubling of duties.
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Consult a licensed US customs broker
Consulting a licensed US customs broker is the most surefire way to identify and avoid anti-dumping duties. Customs brokers are experts in the intricacies of government documentation practices and are up-to-date with all the latest anti-dumping duties. They can help you determine if your goods are subject to additional duties and handle the documentation and processing of your shipment.
Customs brokers have access to ABI Software, which they can use to query Harmonized Tariff Schedules (HTS) codes to determine if applicable anti-dumping duties apply to your goods. HTS codes are provided for convenience, but the description and nature of the goods determine if they fall within the scope of an anti-dumping case. Customs brokers can help ensure you are using the correct HTS code, as using an incorrect one to circumvent anti-dumping duties will likely be discovered by Customs and Border Protection (CBP) agents, leading to fines and seizure of goods.
Customs brokers can also advise on other ways to avoid anti-dumping duties, such as by not importing goods under an anti-dumping order or by filing for a customs duty drawback if you plan to re-export or dispose of the goods in question. They can also provide guidance on Section 301 trade action lists, which are relevant if you plan to import anything from China, as your products may incur additional duty rates.
By partnering with a licensed US customs broker, you can navigate the complex world of international trade and ensure your business remains compliant with all relevant regulations, avoiding unexpected costs and delays.
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File for a customs duty drawback
If you plan to re-export or destroy/dispose of goods that have incurred anti-dumping duties, you may be able to avoid these extra fees after the fact by filing for a customs duty drawback. This is a refund of duties, internal revenue taxes, and certain fees collected upon the importation of goods and refunded when the merchandise is exported or destroyed.
There are several ways to file for a customs duty drawback:
- Hire a licensed customs broker to file a claim on your behalf. Customs brokers will handle all aspects of claim filing, including constructing and electronically transmitting the claim to US Customs and Border Protection (CBP).
- Self-file your claims through a service bureau, which provides both the software and the communications connection to the CBP Data Center.
- Establish your own communications connection to the CBP Data Center in order to self-file your claims. Note that this process will take 3-6 months to complete.
The application requires sample transaction documents and details about your business operations, which are then used by CBP to determine if you are eligible for the drawback program. You can file a drawback claim for goods that were imported up to five years ago, as long as they were exported after the import date.
If you are eligible for drawback, 99% of certain duties, fees, and taxes are reimbursable. Eligible duties include ordinary customs duties, merchandise processing fees (MPF), and harbor maintenance taxes (HMF).
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Check Section 301 trade action lists
To check Section 301 trade action lists, you can refer to the United States Trade Representative website. Here are the steps to navigate the Section 301 tariff process:
Step 1: Know Your HTS Subheading
Each product subject to Section 301 actions is identified by an 8-digit or 10-digit HTS (Harmonized Tariff Schedule) Subheading. You can search for your product's HTS Subheading using the search engine provided on the website. If you do not know the HTS Subheading for your product, you can contact your supplier, distributor, or customs broker.
Step 2: Use the Product Search Page
Once you know your product's HTS Subheading, you can use the Product Search Page on the website to determine if your product is subject to the Section 301 actions. Enter the 8-digit HTS Subheading into the search field to obtain information about whether your product is affected and the rate of additional duty. Each HTS Subheading includes the action or modification, a description, and the Section 301 duty rate.
Section 301 Trade Action Lists
The Section 301 trade action lists outline the specific trade actions and their values:
- List 1: $34 Billion Trade Action
- List 2: $16 Billion Trade Action
- List 3: $200 Billion Trade Action
- List 4: $300 Billion Trade Action
These lists are part of the Section 301 tariff actions and exclusion processes related to China's technology transfer practices.
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Reference government websites using Harmonized Tariff Schedules (HTS) codes
To avoid anti-dumping duties, importers must reference government websites that use Harmonized Tariff Schedules (HTS) codes to determine if extra fees apply to their ordered goods. The Harmonized System (HS) is a global product classification system that assigns specific six-digit codes for different classifications and commodities. While the Harmonized System uses six-digit codes, the United States requires a 10-digit number to classify products being imported or exported. The first six digits of the 10-digit number will be the same as the HS code.
The Census Bureau offers a free online Schedule B search engine that can help classify products for export. The Schedule B search tool is the most commonly used method for classifying products. The Customs Rulings Online Search System (CROSS) database can also be used to find the HS code for an imported product. CROSS contains legally binding rulings from requests for Harmonized Tariff System (HTS) numbers for products importing into the United States.
In the case of anti-dumping duties imposed by China on broiler chicken products from the United States, the United States challenged China's Ministry of Commerce (MOFCOM) on its allocation of costs and conduct of investigations. The United States claimed that MOFCOM acted inconsistently with various provisions of the World Trade Organization (WTO) Anti-Dumping Agreement. The Panel upheld some of the United States' claims, including that MOFCOM did not provide an opportunity for interested parties with adverse interests to meet and present their views.
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Frequently asked questions
Anti-dumping duties are tariffs imposed by a government to enforce fair competition in a free market economy.
The best way to avoid anti-dumping duties is to not import goods that are under an anti-dumping order. Importers must reference government websites using Harmonized Tariff Schedules (HTS) codes to determine if these extra fees apply to their ordered goods.
China has imposed anti-dumping duties on US chicken products and Brazilian chicken meat.
If you plan to re-export or destroy/dispose of the goods, you may be able to avoid anti-dumping duties by filing for a customs duty drawback, which is a refund of duties and taxes paid on qualifying imported shipments. Consulting a licensed customs broker is also a surefire way to identify and avoid anti-dumping duties.
Anti-dumping duties can be unpredictable and costly for importers. They can also lead to trade disputes and market closures, as seen in the case of China's anti-dumping duties on US chicken products.
