Abstract
Two of the chief tools of US trade administration are countervailing duties, intended to eliminate the effects of foreign subsidies on US imports, and anti-dumping duties, intended to eliminate the effects of unfairly low prices on imported merchandise. When products are subject simultaneously to both types of trade remedies, care must be taken to avoid the double penalization of the imports. This article models the ‘level playing field’ rationale that underlies both types of trade remedies and extends that model to cases in which the remedies are applied concurrently. The results demonstrate that proposed changes to law and practice with respect to ‘non-market’ economy exporters would cause double penalization, creating an additional deadweight loss from trade regulation.
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