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Simple English definitions for legal terms
countervailable subsidy
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A quick definition of countervailable subsidy:
A countervailable subsidy is a type of financial assistance given by a foreign government to a company that exports goods to another country. This subsidy can take many forms, such as tax breaks, low-interest loans, or research-and-development support. If the importing country believes that this subsidy is causing harm to its domestic industry, it can impose a countervailing duty on the imported goods. This duty is meant to offset the advantage that the subsidy gives to the foreign company.
A more thorough explanation:
A countervailable subsidy is a financial contribution made by a foreign government or public entity that benefits exporters to another country. This subsidy can take various forms, such as tax breaks, low-interest loans, or research-and-development support.
For example, if a foreign government provides a low-interest loan to a company that exports goods to the United States, this would be considered a countervailable subsidy. The United States may impose a countervailing duty on these goods if they cause or threaten to cause harm to domestic industry.
Another example of a countervailable subsidy is when a foreign government provides raw materials to a company at below-market prices, giving them an unfair advantage in the global market. This subsidy can harm domestic industries in other countries and may lead to the imposition of countervailing duties.
In summary, countervailable subsidies are financial contributions made by foreign governments that benefit exporters and can harm domestic industries in other countries. These subsidies can be countered by imposing countervailing duties on the imported goods.