Thread by @scottlincicome

So I have just learned that my flight home has been delayed until almost 1a. Time for some trade theory. 1/293

Let's start with the United States' unique and onerous retrospective duty assessment system for antidumping duties & countervailing duties 2/293

US companies who contract to buy goods from countries/companies subject to US ADCVD orders pay cash deposits - reflecting the current duty rate & amount owed - to customs when those goods enter the USA. Not fun!

BUT that's not the end of the story! 3/293

NOOOOOOO. Then every year (basically) the US conducts an "administrative review" to determine the actual duty rate applicable to the GOODS YOU'VE ALREADY IMPORTED at the old deposit rate. This means that the duties you *thought* you owed the US govt could change. A lot. 4/293

And, as a US importer, you may have very little control over how much those rates change. Bc you're not really involved in the admin review process (which is really abt foreign exporter/govt practices & cooperation during the review). So... 5/293

You could be a perfectly legitimate US company importing perfectly legal goods at a perfectly legal duty rate you THOUGHT you owed. And then, suddenly, an admin review is completed and the duty rate increases - a LOT - on stuff you've ALREADY IMPORTED. 6/293

Thus leaving you on the hook for much higher duties than you originally figured based on the previous deposit rate that you were told applied (again, on goods you've already imported - maybe a year ago).

And then the US government comes to collect the difference. 7/293

So what do you do? Well, you either pay the difference or you... hbsdealer.com/article/us-ant…

BUT WAIT THERE'S MORE. 9/293

If you're importing from a standard "market economy" (as defined under the dumping law) country, you may be able to figure out your future duty liability bc you can (theoretically) know the exporters' prices/costs used to calculate rates in advance. 10/293

So you could get hammered but you can theoretically work in advance to avoid it (or at least know what's gonna happen). 11/293

If you're importing from China or any other "non-market economy", however, you have far less control. Why? Bc the law requires duty rates to be calculated using prices/costs FROM ANOTHER COUNTRY. 12/293

This means that, as an importer, you could have NO IDEA what duty is eventually applied (and what you owe) on imports already in your warehouse (or processed/sold) 13/293

This is all, of course, a giant "non-tariff barrier" to imports (as even supporters acknowledge). And the USA is one of the few countries in the world that still does this.

BUT, hey, that's the law. And importers/exporters work thru it everyday (thanks, lawyers!) 14/293

Just something to keep in mind the next time you hear someone decrying "dumping" /fin

(guys I'm not going to 293. Sheesh)