Countervailing Duties (CVDs)

Countervailing duties are tariffs used to make sure no one benefits much more than anyone else from international trading.

The exporting country pays these tariffs so they can’t sell their products at a substantially lower price than what they're sold at in the importing country.

Think of it like this. China makes, well...everything, really cheap. If we assume a Chinese company is getting subsidies from their government to make some product and then sell it to the U.S. for a price that’s substantially lower than what the companies in the U.S. can make it for...the U.S. government can use countervailing duties to make sure that domestic companies don’t suffer at the hand of Chinese companies.