Dumping is the sale of goods to a country at less than fair market value, usually when less than comparable goods are sold in the domestic market of the exporter, and there is injury or a threat of injury to importer country’s industry. Anti-Dumping duty is assessed when a foreign manufacturer sells to importer country at less than a fair value AND there is an injury or threat of injury to importer country’s industry. The anti-dumping margin (or AD duty rate) is set to represent the difference between the fair market value of the merchandise and the exporter’s sale price. ADD margins may be specified by manufacturer.
Anti-dumping is a measure to rectify the situation arising out of the dumping of goods and its trade distortive effect. Thus, the purpose of anti-dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade.
Anti-dumping duties are taxes imposed on imported goods in order to compensate for the difference between their export price and their normal value, if dumping causes injury to producers of competing products in the importing country.