Stay Ahead of the Game: Understanding Antidumping Duties
Hey Import pros! One issue that doesn’t get enough attention but can seriously impact your supply chain is the imposition of Antidumping duties. But how can you tell if your cargo is subject to these duties and how do these duties work?
Let's break it down.
First off, what are Antidumping duties?
Antidumping duties are punitive measures levied by Customs when foreign companies are selling a product for import at a lower price than the fair market value, which can harm domestic producers.
So, how can you tell if your cargo is subject to Antidumping duties?
Well, the first you can do is contact an Importal Pro to ensure that you're up-to-date on any changes in regulations and trade policies 😎
Or you can check the Department of Commerce's website to see if any Antidumping duties have been imposed on the products you're importing.
It's also important to keep in mind that Antidumping duties can vary by country. What might be subject to Antidumping duties in one country might not be in another. So, if you're importing products from multiple countries, then you'll need to do your research to ensure that you're compliant with all the regulations and trade policies in each country.
Let’s look at an example of how ADD can impact your business!
Here are two shipments of mattresses coming from two different countries but have radically different duty rates;
Country of origin - Mexico
Invoice Value - $100,000
HTS code: 9404.21.0010
General Rate - Free
ADD Rate - None
Duties owed = $0
Country of origin - Malaysia
Invoice Value - $100,000
HTS code: 9404.21.0010
General Rate - Free
ADD Rate - 42.92%
Duties owed = $42,920! Ouch, Antidumping duties can seriously hurt your business but if you source your product from a strategic country, you can save thousands in duties and pass the savings along to your consumers all while retaining excellent margins 📈
Antidumping deposits: the murky world of import regulations
Even though Antidumping duties are paid at the time of import, they are technically only a deposit which makes the process even more murky. The rate of the deposit can increase or decrease over time as US Customs continues to investigate the pricing practices of the foreign company. If the investigation reveals that the foreign company is continuing to sell goods at unfairly low prices, the deposit rate may be increased resulting in additional duties owed to US Customs. If the investigation finds that the foreign company has improved its pricing practices and is now selling goods at a fair price, the deposit rate for Antidumping duties may be reduced or removed completely. This means that the importer may be eligible for a refund of the deposit they paid earlier. Let's take a look at an example of how these deposits work;
Let's say you import products that are worth $20,000 in 2023 with an Antidumping rate of 50%, owing $10,000 in duties. 5 years later, US Customs increases the rate to 100%, you would now owe US Customs an additional $10,000 in duties. But let's say US Customs decreases the rate to 2%, you may be entitled to a $9,600 refund.
In conclusion, understanding if your cargo is subject to Antidumping duties duties is crucial for any importer. Stay informed, work with your suppliers, and do your research to ensure that you're compliant with all the rules and regulations. Keep hustling, supply chain fam!
